REAL WORLD EVENT DISCUSSIONS

The Capitalist Manifesto

POSTED BY: YULAW
UPDATED: Tuesday, January 31, 2006 22:34
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Sunday, January 29, 2006 12:26 AM

YULAW


A specter is haunting the World - the specter of Capitalism. All the powers of the Welfare State have entered into a "progressive alliance" to exercise this specter: Social Democrats and Greens, UN and EU, bureaucrats and lobbyists, intellectuals and media.

Where is the champion of free markets who has not been decried as a right-wing extremist or worse by his opponents in power? Where are the defenders of the Welfare State who have not hurled the branding reproaches of being greedy, insensitive and uncompassionate against those of us who oppose ever-increasing taxes, transfers and government programs?

Two things result from this fact.

I. Capitalism is already acknowledged by all socialist powers to be itself a power.

II. It is high time that Capitalists should openly, in the face of the whole world, publish our views, our aims, our tendencies, and meet this nursery tale about the specter of Capitalism with a Manifesto announcing its goals.
To these ends, a Capitalist of democratic values has acted to sketch the following Manifesto.

Overview

Capitalism is a trinity of systems in one - an economy based predominantly on markets and incentives, a democratic polity, and a moral-cultural system that is pluralistic and liberal. The free-market system fosters economic growth, social mobility, and self-reliance. Political liberty introduces pluralism, democracy, and the idea of a constitutional government. The moral-cultural system is buttressed by the mediating structures of family, church, and other voluntary associations.

The key component of capitalism is freedom. No other system has produced an equivalent system of liberties, loosened the bonds of station and immobility, and so valued the individual. Capitalism is a system of natural liberty that forms the basis of genuine community. People are free to associate (i.e., to form innumerable voluntary associations). Capitalism destroys old static patterns of community but creates instead a more fluid form of communitarian free association. For example, the corporation (a voluntary association) unites people in a common goal and gives them a sense of meaning and purpose. The cooperative institution of the corporation illustrates that the spirit of democratic capitalism is far from the anarchic individualism that critics might claim it to be. In fact, the system's antidote for social uprootedness is the corporation, in which populations of mobile workers are organized into teams of task-oriented colleagues.

Capitalism assumes pluralism, recognizes that individuals have differing opinions and interests, and allows them to associate in order to further those interests. Pluralism assumes the reality of sin. Pluralism's multiple groups provide a balance of power. The chief purpose of pluralism is to fragment and check power.

Capitalism taps individual creativity and initiative and relies on self-interest, not in the sense of individual greed but to benefit others, the principal other being the family. Capitalism offers an outlet for greed and reinforces habits of prudence, thrift, industry, tolerance, and restraint in everyday life.

Socialism is based on a number of assumptions similar to those underlying traditional society, which helps to explain its appeal in Third World countries. Both socialism and traditional society have "zero-sum" concepts of man, nature, and wealth. This view implies that no gain can be realized without cost. (As an example, no one can earn money without it being taken from someone else). It follows that without strong control by government, religion, and tradition there would be a war of all against all. Control is thus needed to prevent excessive individualism. Both traditionalism and socialism represent rigid, closed societies that stifle individuality and creativity.

Under the socialist view:
(1) capitalists become wealthy by exploiting workers,
(2) capitalist nations exploit Third World nations, and
(3) the elimination of private property will end such exploitation.

Socialism is especially appealing to three groups. Political elites in socialist countries have a vested interest in maintaining a system that secures their influence. In addition, socialism offers political elites in Third World countries a chance to consolidate great power. Finally, socialism appeals to many intellectuals - especially Roman Catholic theologians. Many intellectuals have traditionally associated capitalism with the Protestant Reformation and have believed it to be excessively materialistic, individualistic, and destructive of community. They have been more attracted to socialism, which they believe is more consistent with religious doctrine that was formed before capitalism came into being. Socialism also offers intellectuals a way of participating in power and imposing their ideas on society.

The socialist speaks of possibilities while the capitalist speaks of realities. Socialism thus has appeal only in the abstract, as an ideal. Capitalism and socialism should be judged on their performance in the real world. Current arguments often have us contrasting capitalism's realities with socialism's ideals. Socialism is nearly always justified in terms of its vision. Socialists deserve credit for pure idealism - however unworkable their theory becomes in practice. They receive rhetorical points by comparing their utopian vision with the flawed realities of existing capitalist societies; however, when each system is measured by its real-world performance, capitalism proves to be more productive of goods, services, and personal liberation. An ideal that cannot be put into practice is false and morally unacceptable.

As history demonstrates, Marxist practice consistently fails. In Poland, four decades after the liberation of workers from "capitalist oppression", workers were worse off than their counterparts in even the least developed capitalist states. The success stories of the Third World are countries that have supported capitalism (e.g., Taiwan and Singapore), while the failures are countries committed to socialism (e.g., Algeria).

Capitalism succeeds because it is an economic theory designed for sinners of whom there are many, just as socialism fails because it is a theory designed for saints of whom there are few. Capitalism is able to convert individuals' private ambitions into the creation and distribution of wealth so that everyone has a solid material base. Unintended consequences make moral systems out of a variety of motives (e.g., when individual self-interest leads to a system that produces economic abundance, political liberty, and a free pluralistic culture) and makes immoral systems out of moral motives (e.g., tyrannies that have emerged from modern experiments in collectivism). Capitalism demands freedom in order to function and thus liberates those who live under it; socialism ostensibly supports such liberation but, in fact, requires sharp restrictions of freedom in order to function.

People are necessarily related to others; however, they can determine to a large extent the persons they will be related to and the ways in which they will be related. People are responsible for creating and entering relationships that will enable them to flourish. Communities arise when people unite together to search for and realize their essential being.

Inherent in respect for the human person is respect for the reflectively chosen forms of association that persons create to pursue their common interests. These freely chosen associations are not only philosophically and practically prior to the state but are also defenses against the state.

The virtue of enterprise can be taught and a social system can be constructed to enable human beings to create wealth in a sustained and systematic way. The best way to help the poor is through a system that creates economic growth from the bottom up - a system that creates jobs for the poor. To help the poor is to help each poor person exercise his right to personal economic initiative (i.e., to be creative). The wealth generated by a capitalistic model can best actualize the promise of self-betterment and freedom for the poor in Latin America and elsewhere. What is distinctive about the capitalist system is its discovery that the primary cause of economic development and the wealth of nations is wit, invention, discovery, and enterprise. Each nation's greatest resource is the creativity in every single person. Each has the capacity to create more in a lifetime than he or she consumes. This is the very principle of human economic progress. One should leave the world better off than he or she found it. Capitalism is the system that best allows one to create more than is consumed, and is the social system that best nurtures our capacities for liberty, responsibility, and growth in the political, economic, and moral-cultural spheres.

The economic positions of North America and Latin America were roughly similar during the late eighteenth and early nineteenth centuries. The conventional explanation today for the fact that North America is rich and Latin America is poor is that North America exploited Latin America. However, United States investment in Latin America is actually relatively small and that its poverty existed well before there was any United States investment there at all.

Latin America

A perfect example of the abomination and failure of an economic model that is socialism is the economic situation of Latin America. The real reasons for poverty in Latin America is that it did not adopt an economic system that would allow for development. Spain held a narrowly mercantilist economic theory, which emigrated to Latin America and provided a very weak foundation for economic development. Spain's mercantilism contrasts with the individualism of North America. The nineteenth-century Roman Catholic Church, by opposing capitalism at the time, is another cause of poverty in Latin America. Liberation theologians, opposed to the traditional Church hierarchy in virtually all other areas, agree with it in despising capitalism. Southern European Catholicism shaped the development of Latin America with unfortunate consequences that liberation theologians now mistakenly attribute to Anglo-American capitalism. Most important, there is a philosophical gulf between Latin America and North America. Latin Americans and North Americans do not value the same moral qualities. Latin Americans feel inferior in practical matters and superior in spiritual ones. In Latin America, powerful personages control nearly everything. The Catholic aristocratic ethic of Latin America places emphasis on luck, heroism, and status while the Protestant ethic of North America values diligent work, steadfast regularity, responsibility, and accountability. In Latin America, wealth is rather static and appears to justify the "zero sum" philosophy.

Socialism feeds the strong, traditional, social sense of Latin America by meeting the need for a unitary order, sharply focused on feelings of resentment and economic inferiority and providing a simple scheme of good and bad. The involvement of Latin American clergy with liberation theology brings about the possibility of a Church-State alliance. This blend of Christianity and Marxism offers a road to power and influence that Christianity alone can no longer provide. Liberation theologians claim that Christianity is the religion of which socialism is the practice.

The basic reason that Latin America is poor is that it offers insufficient economic opportunity for the people. Latin America offers few cultural or legal supports for the operation of a capitalist economy. Latin America must address the question of the proper and just arrangement of social institutions that are oriented toward the multiplication of acts of reflective choice and the maximization of personal economic creativity for the sake of the common economic whole. Those who wish to liberate human beings from poverty should concentrate on their nation's primary resource - the minds and spirits of the citizens at the bottom of society.

Many of the poor in Latin America are entrepreneurs who make and try to market artifacts or provide services. Although the people are enterprising, the legal structures of these traditional, precapitalist societies obstruct and frustrate the creative instincts of the citizens.

There are ten practical proposals for Latin America, Eastern Europe, and elsewhere that will move countries toward the combination of democracy and market economy that is found in the United States. In order to design social systems that liberate citizens for the free exercise of enterprise, nations need to:

(1) recognize in law the right of personal economic initiative;
(2) allow for swift, easy, and inexpensive access to legal incorporation;
(3) empower all citizens with all relevant legal and social supports for their economic activities and to build institutions to instruct them in how to make use of them;
(4) establish institutions of credit accessible to the poor that also give professional advice on how to make their enterprises successful;
(5) favor by law and tax incentives virtually universal home ownership, land ownership, or both with full rights of ownership in perpetuity;
(6) grant workers in state industries, utilities, and the like stock ownership in the enterprise through employee stock ownership plans (ESOPs);
(7) privatize by selling off most state enterprises to the public;
(8) give primacy among social welfare expenditures to building systems of universal education that stress the virtues of initiative, enterprise, invention, and social cooperation;
(9) strengthen the voluntary, non-statist social sector by laws and tax incentives favorable to the development of foundations and other private institutions of social welfare, not as a substitute for state-sponsored social welfare programs but as a fresh source of innovation and public service; and (10) develop strong copyright and patent laws that grant to authors and inventors the right to the fruits of their works for a limited time.

Social Justice

Capitalism depends on a culture characterized by creativity, inventiveness, discovery, cooperative effort, social initiative, openness to change, adaptability, generosity, experimentation, and voluntary participation. This is the type of capitalism advocated by Adam Smith and the Founding Fathers. This kind of capitalism is inherently social and brings companies and other voluntary associations into existence in order to create goods, services, and profits. In this way capitalism fosters the development of a variety of voluntary associations, nourishes virtues such as honesty, hard work, productivity, and thrift, and enriches the social and moral lives of the participants.

Social justice is a personal virtue. The old vision of social justice is as a guiding rule asserted by a supreme authority in society (i.e., the state). Social justice, so defined, is realized through public institutions and authorities. This type of social justice is not a virtue. It gives the state, through its laws, constitutions, and institutions, the authority and power to determine the structural shape and form of society, that is, it brings about a legal and social order. It is no wonder that "social justice" has become the chief battle cry of those who would expand the role of the government, especially with respect to redistribution. This is the understanding of social justice is an arid, abstract ideal enforced by an all-powerful state that encourages dependency and submissiveness.

Social justice must be interpreted as a distinctive virtue of free persons associating themselves together, cooperatively, within a free society. The practice of social justice means activism, organizing, and trying to make the system better. Social justice is a specific modern form of the ancient virtue of justice that is exercised as a social habit when men and women join with others to change the institutions of society. It does not mean enlarging the state; rather, it means enlarging civil society. This concept of social justice links it to the concrete intelligence of individuals in their free associations, rather than to the state.

Social justice involves the readiness to use one's imagination and creativity to help others. For example, personal work among the needy should not be substituted for the bureaucratic welfare state. The habit of social justice has as its aim the improvement of some feature of the common good - possibly of the social system in whole or in part (e.g., the welfare system) but possibly as well of some nonofficial feature. Works of social justice might include diverse acts such as tutoring a disadvantaged person from the inner city, building a factory in a poor area, or organizing a drama club in a college. In a pluralistic society different grasps of current realities and different visions of the right ordering of the just society may lead people to opposite courses of action. This leads to the need for rigorous public debate and moral analysis. The concept of social justice has greater explanatory power when it is related to the concepts of civil society enlivened by the principle of subsidiarity, the tripartite nature of liberty, spontaneous order, common good, and change as creative destruction.

Capitalism means an economic system that recognizes the fundamental and positive role of business, the market, private property, and the resulting responsibility for the means of production, as well as free human creativity in the economic sector. However, such an economic system needs to be circumscribed within a strong juridical framework, which places it as a particular aspect of human freedom, the core of which is ethical. Thus, capitalism must have a moral and cultural foundation.

Socialism fell because it violated the human right to private initiative and the ownership of private property. The error of socialism was anthropological in nature. Socialism considered the person as an element in the system subordinate to the functioning of the socio-economic mechanism. However, human nature is designed for and requires freedom. Men must be free to trade, make profits, create, and innovate.

State intervention, when needed, should be minimal and brief and should defend collective goods, promote balanced growth and full employment, stimulate jobs, ensure a just wage, and exercise a substitute function when social sectors or business systems are too weak or are not equal to the task at hand.

People make up a firm's most valuable asset. The possession of knowledge, technology, and skill is the kind of ownership upon which the wealth of industrialized nations is based. The chief causes of the wealth of nations are persons' enterprise, innovation, organizing skills, and creativity. Many people, especially in Third World countries, do not have the means to take their place in the productive system - they need knowledge and training.

The poor are oppressed because of the absence of capitalism. Poorer countries' problems are caused by their inadequate integration into the wealth-producing world economy. In addition, economic protectionism brings on stagnation and recession.

Consumers need education and it is wrong for a style of life to be directed toward having rather than being. Consumerism, seeking possessions rather than developing character, results not from the economic system but from weaknesses in the socio-cultural system. Consumerism is the reduction of man to a consumption unit. Economics is not the most important aspect of man for he also has political and cultural (i.e., moral and spiritual) components. The most significant threat to democratic capitalism does not lie in the economic or political sector but in the moral-cultural sphere.

If our moral and cultural institutions fail, all the rest of ordered liberty is lost. If the primary flaw lies not in the political system or the economic system but in our moral-cultural system, then the prognosis is hopeful. If the fatal flaw lies in our ideals and morals (i.e., in ourselves) then we have a chance to mend our ways. The hardest part of the moral task we now face is the power of the adversary culture with its emphasis on equality of results and moral relativism.

The welfare state leads to a loss of human energies and is accompanied by an enormous increase in spending and an inordinate increase of public agencies that are dominated more by bureaucratic ways of thinking than by concern for serving their clients.

The poor in Third World countries must be brought into the capitalist system. Foreign aid, when given, should be allocated directly to ordinary people - not in the form of welfare payments but in the form of education, training, and credit for the launching of small local businesses.

Within capitalist nations, the good of the poor needs to be much better served than it has been by dependency-creating welfare programs. Family, friends, neighbors, fraternal societies, churches, unions, clubs, and so forth should assist those in need. Such local assistance will need to be backed up by a national safety net. Some persons in every society will suffer from physical, emotional, or moral disabilities and that some portion of the citizenry will be without income because of age, illness, or ill-fortune. Care must be taken to make sure that ill-designed assistance programs do not lure the able-bodied into self-destructive dependency.

Persons on welfare should be permitted to accumulate assets. Assistance should encourage the building up of assets - not the extension of dependency. One way to do this is to privatize public housing. Another is to help the poor start their own businesses. Instead of issuing welfare checks, the government might issue matching grants to IRA funds begun by poor persons. These funds would grow tax-free until used for investments in new businesses, home purchases, or educational or training programs.

For any republic to survive, envy must be defeated, and the best systematic way to defeat this vice is through economic growth and open access. A system of open opportunity takes allocation, favoritism, and preferences out of politics. True social justice begins by removing systems of political allocation and group favoritism, so that the rule of law may be equally applicable to every individual. Multiculturalism is currently being used to single out certain cultures for special status, favors, and discriminatory treatment.

Needed social programs within America include:
(1) identifying the core illness of the underclasses as envy founded on a feeling of failure and incompetence in the arts of civil society;
(2) stressing the necessary role of parents (especially fathers) in teaching these arts;
(3) conditioning welfare supports for children on the work and education records of both their mothers and fathers;
(4) giving welfare benefits to young mothers of small children in congregant settings only (such as local churches and schools) in which they can be brought out of isolation;
(5) shaming the media into recognizing their role as supports to parents;
(6) devising methods for helping the dependent poor become owners;
(7) giving public housing projects constitutions of self-government;
(8) turning every institution of civil society to focus on the development of human capital in poor urban areas through the organization of academies, competitions, and training programs;
(9) experimenting with enterprise zones, with heavy emphasis on job training and apprenticeship programs;
(10) apprenticing young blacks to local entrepreneurs;
(11) demanding courtesy, neatness, promptness, and orderliness in schools with work-study programs for apprentices in the community after school; and
(12) demanding ever more of the young.

Our work is us and that each person is involved in a life-task of human flourishing, to realize in community with others, the potential that is his by reason of his own humanity. Character development is a critical ingredient for human flourishing and that business in a free economy not only requires, but also rewards, virtuous behavior by the participants. The free market rewards honest, trustworthy, fair-dealing, creative, discerning, tolerant business persons. Unethical behavior often leads to personal and business disgrace.

The Corporation

Business is much more than what a person does to acquire material wealth or success. Business is also a morally serious vocation in that it allows a person to act either morally or immorally. Furthermore, it is a noble endeavor worthy of a person's highest ideals and aspirations in that it creates social connections, lifts its participants out of poverty, and builds the foundations for democracy and the institutions of civil society. The calling of business is to support the reality and reputation of capitalism, democracy, and moral purpose everywhere, and not in any way to undermine them.

A successful corporation is one that is morally responsible. Although individual business persons may be unethical, they are the exceptions since capitalism provides strong incentives for moral behavior. Successful business executives practice three cardinal business virtues - creativity, community building, and practical realism.

Business as a mediating institution has seven internal responsibilities that arise from the nature of the corporation itself and an additional seven external responsibilities that happen to be derived from spiritual teaching.

In order to succeed, a business must:
(1) satisfy customers with goods and services of real value;
(2) make a reasonable return on the resources entrusted to it by investors;
(3) create new wealth;
(4) create new jobs;
(5) defeat envy by generating upward mobility and by demonstrating that talent and hard work will be rewarded;
(6) promote inventiveness and ingenuity; and
(7) diversify the interests of the republic, thus guarding against majoritarian tyranny.

The additional external responsibilities are not found in business as business but in the convictions of its practitioners who bring their faith to the business world:
(1) to shape a corporate culture that fosters the three cardinal business virtues as well as other virtues;
(2) to protect the political soil of liberty;
(3) to exemplify respect for the rule of law;
(4) to reflect and act in practical effective ways, individually and with others, in order to improve aspects of society;
(5) to communicate often and fully with investors, pensioners, customers, and employers;
(6) to voluntarily contribute toward the improvement of civil society; and
(7) to protect the moral ecology of freedom.

The corporation is a voluntary and part-time association of civil society, that is, it is not a total community. Rather, the corporation is a social invention that springs from the acts of its founders who work to provide goods and/or services at a profit with fiduciary care for the investments entrusted to it. As such, the corporation occupies a primary position in the building of the main alternative to the state, namely, civil society.

From the point of view of civil society, the corporation is an important social good:
(1) it creates jobs;
(2) it provides desirable goods and services;
(3) through its profits, it creates wealth that did not exist before; and
(4) it is a private social instrument, independent of the state, for the moral and material support of other activities of civil society.

The corporation's independence from government makes it a vital pillar for democracy and freedom. Sources of private capital and wealth are critical to the survival of freedom - the alternative is dependence on the state. The corporation is the chief supporter of research, the arts, universities, charities, and other good works. In addition, corporate ownership extends through more than half of the adult American population through pension plans, mutual funds, and so on, thereby securing the financial hopes of individuals and families. Most important, corporate activities expand the space for private action and independence from the state.

The corporation is the most successful, transformative, and future-oriented institution in the world. It is an unequaled creator of wealth, products, and services, amassing capital and mobilizing people to accomplish innovative and complex tasks.

The key role played by intellectual property laws in innovation and wealth creation. If you want more of something, then you should reward it. Patent and copyright protection recognizes the rights of inventors and authors to the fruit of their labor and unintentionally advances the common good through the pursuit of private interests by providing incentives for investment, wealth creation, and the provision of employment.

Reflecting on the history and distinctive nature of the corporation as a social invention, prior in its existence to the modern nation-state shows that the state arbitrarily created and retained the "right" to approve of corporate applications and to register them, but that it did not create the right to incorporate or guarantee the corporation's survival. A corporation can only survive if it meets the needs of its customers and the purposes of its investors.

Corporate governance does not mean corporate government and most discussions of corporate governance tend to be wrongly conducted in the language of political philosophy rather than of business philosophy. Scholars need to develop a philosophy of business, a heretofore neglected topic, to clarify the purposes of the corporation.

Corporations are not political communities, are not at all like states, and that their self-governance is not at all like that of a national government. In states, power is feared and, therefore, checks and balances are appropriate. In government, the point is to prevent leaders from achieving something beyond their stated powers. Checks and balances are not appropriate for the corporation where the point is to create something new - to achieve something. Within a corporation no one should desire a "separation of powers." Whereas in government we need judiciousness and deliberation in the pursuit of general goals in a relatively static organization, in corporations we value instinct, intuition, and quick action in the pursuit of specific goals in a dynamic organization.

Corporate executives must represent stockholders rather than "stakeholders." A war is still being waged to socialize the American corporation. Business leaders must be wary of modern attempts to recycle socialist ideas. When reformers demand that corporations become more responsible and accountable, they mean dedicated to causes dear to statists such as "saving the environment", restraints on executive compensation, "empowering workers", constraints on internationalization, and the demand for "public interest" corporate directors. Executives must not give intellectual appeasement or funding to the enemies of freedom, including anti-business and special interest groups. To sum it up, corporations serve a moral and social importance in a free society.

The Principles

The theory of the Capitalist may be summed in a single sentence: "The protection of private property." Hard-won, self-acquired, self-earned property! The restoration of bourgeois individuality, bourgeois independence, and bourgeois freedom is undoubtedly aimed at. By freedom is meant free trade, free selling and buying. You reproach us with intending to reassert property rights. Precisely so; that is just what we intend.

On what foundation is the present family, the bourgeois family, based? On capital, on private gain. The bourgeois family will flourish as a matter of course when its complement flourishes. And what of your education! Capitalists have not invented the intervention of government in education; but we do seek to alter the character of that intervention, and to rescue education from the influence of the bureaucratic ruling class.

In order to reach its ultimate greatness, America must:
(1) Reaffirmation of the right of private property and contract, including the right to rent, sell or use the property however the owner peaceably chooses as long as such use does not impinge on the equal rights of others.
(2) Adopt a flat income tax set at the lowest rate compatible with fiscal restraint.
(3) Abolish all inheritance taxes and restrictions.
(4) Guarantee the property rights of all emigrants and dissidents.
(5) Decentralize credit in the hands of the State by withdrawing from the International Monetary Fund and World Bank, and abolition of all credit monopoly.
(6) Decentralize the means of communication and transportation by eliminating funding for the Federal Communications Commission and the Department of Transportation.
(7) Divestiture State-owned factories or other instruments of production such as the Tennessee Valley Authority, Amtrak, U.S. Postal Service, and the Federal Aviation Administration; Abolition of the U.S. Department of Agriculture so that the soil may be improved in accord with decentralized, individual plans.
(8) Invigorate of all labor through repeal of subsidies rewarding unemployment, and abolition of obstacles to freely made labor contracts such as the minimum wage, that attempt to establish an egalitarian labor force.
(9) Affirm the freedom for the population to relocate throughout the country by repeal of all laws that restrict the mobility of capital and labor.
(10) Abolish direct funding for school systems, and permitting competition between government schools and private schools for parents' education dollars, which may be in the form of tax-supported vouchers.

A Capitalist revolution that follows these principles would create the most radical rupture in government control; no wonder that its development involves a slap in the face to modern liberalism. In short, the Capitalists everywhere support every revolutionary movement against the existing collectivist order of things. In all these movements we bring to the fore, as the leading question in each, the property question, no matter what its degree of development at the time.

Finally, we labor everywhere for the cooperation and agreement of the democratic parties of all countries.

The Capitalists disdain to conceal their views and aims. They openly declare that their ends can be attained only by the peaceable overthrow of all existing principles of the Welfare State. Let the ruling elites tremble at a Capitalist revolution. The people who love free markets have nothing to lose but their chains. We have a world to win.

Capitalists and Workers of all Countries, Compete!


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Sunday, January 29, 2006 2:07 AM

KANESKI


A fairly interesting read. A few things popped up in my head as I was reading though:

Quote:
Corporations are not political communities, are not at all like states, and that their self-governance is not at all like that of a national government. In states, power is feared and, therefore, checks and balances are appropriate. In government, the point is to prevent leaders from achieving something beyond their stated powers. Checks and balances are not appropriate for the corporation where the point is to create something new - to achieve something. Within a corporation no one should desire a "separation of powers." Whereas in government we need judiciousness and deliberation in the pursuit of general goals in a relatively static organization, in corporations we value instinct, intuition, and quick action in the pursuit of specific goals in a dynamic organization.


While the notion of removing the restrictions within corporation may promote creativity and individual progress, it opens an enormous gap for personal abuse. Corporations, while social structures, are controlled and directed by human beings, and as such, if unchecked, are succeptible to the same vices. With the great power weilded by a corporation - control of 100,000s of jobs, billions of dollars worth of resources, political and social influence, vital commodities and links to other corporations, an uncontrolled individual directing it can destroy all the good the corporation may have created. Relying on the person to be naturally good (social good - help rather than harm), rational (see the benefits of further development of the corporation), empathetic (concern for people up and down the corporate structure) and up to moral standards is idealistic at best. Hoping that the directing person is all those is exactly what makes makes socialism an unexecutable practice. The idealistic approach to individual freedom within a corporation is a fundamental conflict to the realistic capitalist view. There are only two possibilities for a control system - it either exists or it doesn't. A corporation with an internal control system will restrict individual creativity - it's benefit to society will come through much slower, and in some cases - a good idea will be completely ignored. The silver lining is the control system is a barrier which any destructive action (intentional or unintentional) must overcome. And while the corporate world has brought so much to society, the Western society has become completely dependent on it. A collapse due to 'individual liberty' within a corporation has historically wrought much social upheaval and hardships.



Quote:
Corporate executives must represent stockholders rather than "stakeholders." A war is still being waged to socialize the American corporation. Business leaders must be wary of modern attempts to recycle socialist ideas. When reformers demand that corporations become more responsible and accountable, they mean dedicated to causes dear to statists such as "saving the environment", restraints on executive compensation, "empowering workers", constraints on internationalization, and the demand for "public interest" corporate directors. Executives must not give intellectual appeasement or funding to the enemies of freedom, including anti-business and special interest groups. To sum it up, corporations serve a moral and social importance in a free society.


While I agree with the view that a cry for "social responsibility" from a corporation is a mask for a special interest, the idea that executives should focus ONLY on the interests of the shareholders is unacceptable in the context of human rights and liberties, social benefit and societal good.

Yes, there are tangible benefits to the shareholders from considering the interests of other stakeholders. But such realizations often come through only after the damage to society has been done. Case in point - James Hardie Industries has used carcinogenic materials to build buildings. Several thousand workers got lung cancer and other mortal afflictions. The benefit, however was cheaper homes to those that bought them and a greater financial benefit to the shareholders. Does the good of this scenario outweigh the bad? Are people, for lack of a better word, expendable for the greater benefit of society? I cannot imagine any liberal, capitalist society accepting the necessary deaths of individuals, even for the sake of public good. And even if the argument is made that Hardie was eventually worse off, therefore the benefit to shareholders was less than that if not dangerous materials were used, the damage is already done - people are dead. If the view IS that an individual is expendable if it serves the public good, then this facet of the capitalist doctrine reduces an individual to a disposable, consumable object. A unit of production.


That is what I can see off the top of my head. There are a few other points that I have problems with, but they'll require some reading first.

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Sunday, January 29, 2006 4:07 PM

CHRISISALL


Quote:
Originally posted by Kaneski:
I cannot imagine any liberal, capitalist society accepting the necessary deaths of individuals, even for the sake of public good.
Isn't that what collateral damage is all about?

Just a question.

Terse Chrisisall

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Monday, January 30, 2006 11:41 AM

CITIZEN


Yulaw:
It’s a very long post, and was interesting reading. I have a few exceptions:

Quote:
Originally posted by Yulaw:
The free-market system fosters economic growth, social mobility, and self-reliance.

I've picked this statement as the opener for my reply as it seems to quite succinctly sum up your thoughts on the Free-market system.
If we take a look at the world at the moment America is the nation that most closely follows the Free-market system, and Britain is a nation that employs aspects of both capitalism and socialism. It is reasonable to assume that if you are correct Britain should have a lower social mobility, and one would assume a greater gap between rich and poor than America.
Unfortunately for your supposition this isn't the case. Social mobility in Britain is higher (though still not great) than America and the gap between rich and poor (which is still a gulf) is also less.
Quote:
The key component of capitalism is freedom.

I would say that this is the idealism, how it actual ends up working is (to butcher Orwell) All people are free, but some people are more free than others.
Take a look at 19th Century Britain, a far more capitalist place than today. There was far less restrictions on free enterprise than today. Do you know what you ended up with?
Let’s kick off with some examples. A man works all his life, literally Man and Boy, in a textile mill as a sweeper. He works 12-14 hours a day six days a week (yes these were the working hours). He couldn't refuse because there are plenty of people who are desperate enough for work to work for these hours. After working these hours year in year out, his hand is crushed in the machinery of the automated weave. He can no longer work, and so is useless to the mill owner, who just sacks him and employs another sweeper. The man has no job, and no prospects of getting a job, being essentially a cripple. He dies in a debtor’s prison or a workhouse.
This scenario is played out over and over again through out the 18th/19th centuries, and is nothing to do with a shadowy socialist influence, and everything to do with unfettered capitalism and the free market system. Is this man free?
Consider the food sellers, some of whom (that is the most successful usually) would cut their food with all sorts of nasty substances.
Quote:
Frederick Accum circa 1820
Vegetable substances, preserved in a state called pickles, whose sale frequently depends greatly upon a fine lively green color, are sometimes intentionally colored by means of copper. A young lady amused herself by eating pickles impregnated with copper. She soon complained of a pain in the stomach. In nine days after eating the pickle, death relieved her of her suffering.

Quote:
Spent tea leaves and coffee grounds could be bought for a few pence per pound from London hotels and coffee shops. The used tea leaves were boiled with copperas (ferrous sulphate) and sheep’s dung, then coloured with prussian blue (ferric ferrocyanide), verdigris (basic copper acetate), logwood, tannin or carbon black, before being resold.

http://www.rsc.org/Education/EiC/issues/2005Mar/Thefightagainstfoodadu
lteration.asp
These people didn't adulterate food because they were particularly evil, or because they wanted to kill people, they did it because it meant more profits for them. They did it for capitalism.
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No other system has produced an equivalent system of liberties, loosened the bonds of station and immobility, and so valued the individual.

Actually you’re mixing up democracy and capitalism a bit here, and they aren’t the same thing and do not need to exist hand in hand. Further more people were actually quite free under feudalism.
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This view implies that no gain can be realized without cost. (As an example, no one can earn money without it being taken from someone else).

Okay so people don’t have to get money from others. Firstly where do companies profits come from? The sky, the tooth fairy?
What are all those people doing with their money when they buy things, and what are the other people doing when they accept it?
Money is a representation of real world values; it came about because it’s more convenient to carry around a hundred gold coins than it is to carry a hundred sheep, or cows or whatever. The world has finite resources, so for someone to get more of something someone else has to lose some of what they’ve got.
It’s the same with money, there’s a finite amount, and printing more won’t help, because then you just get runaway inflation.
I hear this argument a lot, but you know what I’ve never heard, HOW it’ll work. So here’s you’re big chance to sell me on this point, where does this infinite amount of money and resources come from so that people can earn money without that money coming from other people?
I warn you though, if you use the old “it’ll just happen, you’ll see” argument I won’t be impressed. I could tell you if you buy my magic lamp a magic tap dancing mongoose will appear and dance the flamenco, but that don’t mean it’ll actually happen.
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Under the socialist view:
(1) capitalists become wealthy by exploiting workers,
(2) capitalist nations exploit Third World nations,

Are you saying that this isn’t the case? Because erm, it is.
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(3) the elimination of private property will end such exploitation.

Well fantasies like this are one of the reasons socialism doesn’t work. Just like fantasies like the infinite resources idea above are one of the reasons pure capitalism wouldn’t work. Guess what, the failures and problems of capitalism within modern societies are not caused by shadowy socialist conspirators. Capitalism fails on its own merits.
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Socialism is especially appealing to three groups. Political elites in socialist countries have a vested interest in maintaining a system that secures their influence.

Much like the elites (the rich) of capitalist countries have the same motivations?
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In addition, socialism offers political elites in Third World countries a chance to consolidate great power.

This happens under capitalist schemes as well. Remember General Pinochet?
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Finally, socialism appeals to many intellectuals - especially Roman Catholic theologians.

Have you seen the Vatican’s merchandise recently? You can’t tell me Roman Catholicism isn’t capitalist, it’s run like a business.
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The socialist speaks of possibilities while the capitalist speaks of realities.

Like the infinite money stuff you were speaking of?
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Capitalism and socialism should be judged on their performance in the real world.

Yes, they should. So let’s stop looking at capitalism through rose tinted glasses that doesn’t allow us to see any of its failures shall we?
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Current arguments often have us contrasting capitalism's realities with socialism's ideals.

Yes, but what you’re actually doing is comparing Socialisms reality with capitalisms ideals, so how’s that any different?
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Socialists deserve credit for pure idealism - however unworkable their theory becomes in practice.

This is true of socialism, yet it is also true of capitalism. Your pure free market capitalism has never been implemented in the real world, so your ‘realities’ are indeed just ideals and conjecture.
I promise you if a pure free market system was really implemented it would fall flat on its face just like socialism.
Quote:
however, when each system is measured by its real-world performance, capitalism proves to be more productive of goods, services, and personal liberation.

There are lots of factors here. I could go on and on but America became largely successful early on by exploiting other peoples ideas, inventions and innovations. America’s root to success is largely through good marketing. Also there’s a predacious amount of luck there, which is pretty much the major deciding factor in who does, and who does not make it, under the capitalist system.
At the end of the day there’s a lot more issues than just whether a country is capitalist or other, and it’s dishonest to pretend otherwise.
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Capitalism is able to convert individuals' private ambitions into the creation and distribution of wealth so that everyone has a solid material base.

Although you’re right about the saints and sinners thing, you’re utterly wrong here. Capitalism does not foster distribution of wealth, it fosters concentration of wealth.
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[capitalism] is the social system that best nurtures our capacities for liberty, responsibility, and growth in the political, economic, and moral-cultural spheres.

You’re again thinking of democracy here, not capitalism.
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However, United States investment in Latin America is actually relatively small and that its poverty existed well before there was any United States investment there at all.

The originally poverty had nothing to do with either capitalism or socialism. The continuing poverty is partly to do with exploitation by those in the position to do so.
Quote:
Latin America

Look up General Pinochet, right-wing capitalist, US sponsored and installed, dictator.

I’ll try to get to the rest of your post if I have time.


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Monday, January 30, 2006 12:11 PM

FLETCH2


There is nothing intrinsic in Capitalism that means that it HAS to be exploitative. Like a lot of things how it works in practice depends on the individuals involved.

For example, while out shopping I stop off at a cafe for a cup of tea. I could have chosen to have something else or wait until I got home. Instead I feel like having tea so I consult the menu, determine the price being asked, decide to buy tea and do so. Some of the cost of that tea covers costs of raw materials, some pays a little towards the wages for the nice young lady that makes the tea, some goes in fixed costs, some is profit for the cafe owner. So who's being exploited? I chose to pay the asking price, if it was too high I would walk by. I am not being exploited. The girl that makes the tea gets paid a wage, making tea is not difficult, cups of tea are not expensive, so it is probable that the girl's wages are modest. However, she is free to find better paying work and the amount she can be paid is related to how much I am willing to pay for tea. In short a result of "market forces." The owner of the cafe probably makes modest profits given the time, effort and capital invested in the business. I dont think however that he was exploited either.

I'm sure that if you look hard enough you can find some part of the global tea business that is not equitable, but the parties involved in this small example of trade have an equitable capitalist relationship.

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Monday, January 30, 2006 12:18 PM

CITIZEN


We're talking reality, not idealism, and frankly on a small scale like this Socialism also works. All the big capitalist world players are where they are through exploitation of those beneath them. That's how capitalism ends up working in the real world. By saying this is because of socialists, or too much control over the perfect free market system is pure fantasy.

If any nation implemented pure free-market capitalism it would collapse as surely as pure communism, and it would be exploitative.



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Monday, January 30, 2006 12:42 PM

FLETCH2


I've read the "it's those damned Socialists ruining it all theories before (especially here where some people relabel almost anything "socialist") but you are in danger of making the same mistake with Capitalism.

Capitalisms "problem" is that as a system it's intrinsically neutral, it isn't trying to build a better world or a fairer world or an equitable world, it just sets up a framework to determine the value of commodities and allow them to be traded. Those commodities can be anything from tonnes of steel, to orange juice to man hours. Morally the best kind of trade is an equitable one where both parties have equal power and the agreement is mutually benefitial. However, as stated capitalism as a system is neutral it does not enforce equitable trades and cannot of itself protect the weak from the strong. There is nothing in the system that says they strong must win, but there is also nothing to stop them and no inherent protection for the weak. That's just what it is.

And Capitalism DOES allow for the distribution of wealth, it just doesn't distribute it on the basis on need or social ethics. That it distrubutes it SO unfairly is often the result of distortions of the system rather than the system itself. In addition modern corporate capitalism sets up mechanism that if Al Capone had thought of them would be considered illegal. For example, the modern stock market is based on speculation where things very rarely reflect their real world values. If the mob had invented such a game for a Vegas casino people would have shut it down, You have instruments with an arbitary value being traded where people that own the most effectively set the value. No wonder the Jersey mob runs internet pump-and-dump scams, the mafia knows a racket when it sees one.

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Monday, January 30, 2006 1:03 PM

CITIZEN


Fletch, that's kinda my point.

The ideal of Socialism is one thing, and the reality is another. I see pure free-market capitalism in exactly the same way, for all you can say:
"All we have to do is remove any stops and regulations and let the capitalists do what they want and the world will be a land of milk and honey" don't make it true.

Frankly a lot of evil can be done within capitalism, that doesn't mean that I think capitalism is evil; it means that I think the last thing we want is a 'free-market revolution', because things aren't going to be better.

All it'll do is give the money and power hungry sociopaths that run this little asylum that we call the Earth more power over the rest of us.
Quote:
Originally posted by Fletch2:
And Capitalism DOES allow for the distribution of wealth

Then what is the explanation for 99% of the world’s wealth being in the hands of 1% of the population?

You know I don't think we can call socialism evil for what has happened in Communist/Socialist nations, but I also don't think we should implement it, because WE corrupt it.

Just like WE corrupt capitalism.

I promise you if free-market capitalism is implemented anywhere in the way Yulaw seems to want you're not going to have a very pretty result.


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Monday, January 30, 2006 1:40 PM

FLETCH2


Quote:
Originally posted by citizen:

Then what is the explanation for 99% of the world’s wealth being in the hands of 1% of the population?



Exactly, it was moved there, redistributed from the various interests that generated it. Capitalism just creates and distributes wealth it isn't nescessarily fair. People with money distort the system to get more money because they HAVE the money to distort the system.

That's the interesting thing about what you can do with capital, it's like magic, it lets you change the governing rules to suit your own agenda. Americans have the right petition their government but who do you think has more success, the 80 year old ex school teacher in a retirement home in Iowa or the guy that can drop Abramoff $10M?

Not capitalism, just plain ordinary graft.


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Monday, January 30, 2006 1:47 PM

CITIZEN


And pure capitalism makes that process easier and easier and easier the more regulations and stop gaps are removed, so we want to implement pure free market capitalism, why?

I still take issue with capitalism distributes wealth though. It's always held up as distributing it more equally amongst the population, which is plainly not the case. It does concentrate wealth, and although the ideal maybe somewhat more even than the reality of 99% in the hands of 1, that doesn't make it any less concentrated.


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Monday, January 30, 2006 3:36 PM

FINN MAC CUMHAL


I tend to think that free-market capitalism works much better then overregulated socio-capitalism, and I site the nuclear industry. And “pure capitalism” is a strawman anyway. No capitalist has ever advocated capitalism without the rule of law, anymore then any socialist has ever advocated socialism without the rule of law.

And I’m not sure that the US is more capitalist then the UK. The last document I remember seeing that compare the economies of the US and UK seemed to suggest that there was greater economic freedom (i.e. more free market capitalism) in the UK then in the US. Of course these things are notoriously hard to measure and I imagine that whatever difference there is between the US and the UK probably falls in the margin of error. So it’s difficult and probably impossible to compare the two.

As far as wealthy people go, anti-capitalist love to talk about all the wealthy people and the so-called income disparity in capitalist countries, but the truth is that this is a red herring to deflect the argument from the fact that socialist countries have far greater income disparity then capitalist countries. To make socialism even worse the wealthy people in a socialist state are almost always associated with or involved in the government.



Oh, he's so full of manure, that man! We could lay him in the dirt and grow another one just like him.
-- Ruby

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Monday, January 30, 2006 4:10 PM

DREAMTROVE


Quote:
No capitalist has ever advocated capitalism without the rule of law


Except mabye Joss

This document needs a lot of work. It's should be about 10% of the length, for starters. There is an excessive amount of political posturing which trumps the philosophical utilitarian arguments.

Capitalism works.
Capitalism is free will to alter society.
Capitalism is equitable and accountable.
Capitalism rewards effort and progress.
Capitalism creates employment opportunities.
Capitalism does task people want done.
Capitalism can funciton in a tax void.
Capitalism evolves through competition and natural selection.

Some amount of attack on it's enemy, Socialism, is warranted, because the fallacies of Socialism need to be exploited.

Socialism doesn't work.
Socialism is top down imposed society.
Socialism is oppressive and unaccountable.
Socialism is top down imposed society.
Socialism forces employment.
Socialism does task goverment wants done.
Socialism requires heavy taxation to function.
Socialism is pre-designed and does not adapt.

I think a more in depth answer is needed, and I'll think about it.

Overall, I think a free society has several key points, democracy, constitiution, and capitalism

Democracy allows us to choose our rulers, and thereby effect the policies that rule our lives.
Constitution gives us rights to do our own thing, say what we want, oppose who we want and organize however we want.
Capitalism is the greatest and most important freedom, because it gives us the power to generate the means to sustain our societies, ourselves.

We no longer need to rely on a state in order to survive. We, the people in a capitalist society, drive our own destiny, whereas those in a socialist state are merely passengers.

Just stating my own right wing rant.

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Monday, January 30, 2006 4:42 PM

DREAMTROVE


Quote:
Originally posted by Citizen:

I still take issue with capitalism distributes wealth though. It's always held up as distributing it more equally amongst the population, which is plainly not the case. It does concentrate wealth, and although the ideal maybe somewhat more even than the reality of 99% in the hands of 1, that doesn't make it any less concentrated.


Capitalism is a meritocracy by natural selection. It's not supposed to be a system of universal equality. It's equitable because the most efficient corporations are those that distribute wealth evenly, and so evolution favors that development. The overwhelming majority of companies worldwide, and even here in America still fall within, or close to, the rule of 8, which is the top salary does not exceed 8 times the lowest salary. Often now, that applies to everyone except the CEO, but that CEO is seldom more than 4 times the other executives. Now this is a disparity, sure, but one based on merit.

In a govt. system, the top wealth is obscenely higher than the bottom. Even in America this is a serious problem. But within each company, things are pretty well distributed, and it's arguably the favoritism that govt. shows to particular corporations which tips the scales, and allows corrupt corporations to continue long past their natural lifespan.

Exxon just posted the highest profit ever for a corporation, $10B. But this is not free market capitalism in action. These profits came from two things:

1. Free oil, stolen from Iraq, which Exxon was given, under the table, and allowed to resell at market.

2. An absurdly high price of oil created by an artificially initiates political situation.

So, if you have a govt. bending over backwards to help you out, then you're golden. But in open competition, eventually the more fair will win out.

Now, critics are going to say "but the cheaters will win." Sure, they will, which is why a limited govt. is necessary to keep the rules fair so that no one can assassinate the rival's ceo's and kidnap their engineers and enslave the workers. But ideally, with all of the proper mechanisms in place, capitalism is the society which runs itself.

Socialism is inherently flawed, because it relies on a govt. spending money. A govt. has no money to spend but that which it takes from the people, from you. If they take your money, then you don't have your money anymore, and your free will is lost, and you only have blind trust that they spend it all on your behalf, and do so perfectly and with absolute accuracy, efficiency and good intent. But reality never even remotely approaches this, and so society is made poorer, less competitive, and eventually whithers and dies.

All of that said. I still see your point. Capitalism is a sink or swim system, and it relies on each individual to be master of their own destiny. Some folks fail. Some of you may remember a couple months ago when an old school classmate came by and stayed a month. He is a hopeless heroin addict, and also an avid socialist, which is neither here nor there, except for this. He certainly isn't a drug addict because he is a socialist, but he is a socialist because he was a drug addict. He needs the state to take care of him. He's a sinker. Throw him back in, and he'll sink again.

So sure, a system is needed to support the sinkers, or they drain on everyone else. Dave drained off of me for a month, and now he is draining off of someone else.

But there are other snags. Capitalism rewards progress. A small amount of people generate the progress, and deserve the wealth. It's nowhere near as bad as $99%/1% pop. but that inequality exists. But it should exist. People should have to work for money. A society that distributes wealth does no work to get it.

Money without work is a disease. Govt, which runs on tax dollars, is capable of far more rash, impulsive and il conceived action because it did nothing to get the cash, and it will suffer no consequences for spending it badly. Only under such a situation do you find things like the war in Iraq, an enormous outlay made essentially on a whim of blind ambition to control the world's oil supply to force a social revolution. But in itself, that control of the world's oil will never remotely be worth the cost.

Think of it this way. Add the oil profits for all stolen Iraqi oil since the beginning of the war, mayb you top $60B. Add the cost of the Iraq war up, and you're way over the Bush Admin estimates of $230B. Most of the Iraq war costs have been burried in supplementals and pay as you go debt bonds, and still more routed through discretionary spending and the all important salary and contact spending. In order to support this war, the govt. spending has balloon to over a trillion in war related costs, and the Christian Science Monitor estiamtes a final cost of $2 trillion by war's end. Even once done, the free oil stolen from Iraq will cost money to pump and ship, probably $10/B and once hostilities end, prices will settle back, probably the $30/$40 range. This means an avg. of say $25/B or about 1/2 or less than the current profit. If this in now $30B/year collectively, and we hack that down to $15B/year, it would take 134 years to pay back the cost, and before that time arrives, Iraq will run out of oil. So, it is an economically not even remotely feasible, except for one thing: The people pay the cost are not the same ones who are receiving the profit. This is because taxes exist, and govt. controls the outcome.

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Monday, January 30, 2006 9:18 PM

FLETCH2


It's an exchange mechanism, it has no moral bias or ideological underpinning which is why you can use it in a liberal democracy, a nazi police state or a communist oligarcy.

If you think it's unfair, it is but for it to be fair the people involved would have to be fair and well they are human.

Are there people rewarded disproportionate to their actual value, unquestionably, but in general successfull people become successfull by working hard. That doesnt mean they are the only ones that do or that all hard work is equally rewarded, but they do put in the hours.

The bad apples, the Ken Lays of the world would be bad apples in any system. Put Ken in a bad suit and he'd be indistinguishable from a 1970's Soviet Apparatchik. There will always be people that want more than they deserve or are willing to work for and those people tend to be cunning enough to manipulate any system they are part of.


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Tuesday, January 31, 2006 12:53 AM

CITIZEN


Quote:
Originally posted by Dreamtrove:
It's equitable because the most efficient corporations are those that distribute wealth evenly, and so evolution favors that development.

If this is the case then how come it is seldom the company that produces the best product that wins out. I can cite numerous examples, but at the end of the day it is nearly always the companies that are most ruthless, not efficient.
Microsoft/IBM won against Apple, not because the IBM PC/Windows is better than Apple Mac/OS but because Microsoft and IBM stole Apples ideas and repackaged them as their own. They then pushed through numerous counter-claims that stopped Apple from effectively taking legal action to protect their intellectual property.
What we have today is the IBM PC (which is architecturally inferior to comparative Macs) and Microsoft Windows (which is inferior to just about every contemporary OS there is).
I don't see many examples where efficiency wins.
Quote:
So, if you have a govt. bending over backwards to help you out, then you're golden. But in open competition, eventually the more fair will win out.

I'm sorry dreamtrove but to me this sounds just like "All we have to do is share the wealth and the socialist state will rise and everyone will be living in a land of milk and honey". The fair never win out if there are people around prepared to cheat.
Quote:
Socialism is inherently flawed, because it relies on a govt. spending money.

And capitalism is inherently flawed because the free market relies on people 'playing by the rules' without enforcing them. I fail to see how a new starter could ever hope to compete with an established competitor who can do ANYTHING they want in order to stay on top of the pile.
Quote:
All of that said. I still see your point. Capitalism is a sink or swim system, and it relies on each individual to be master of their own destiny. Some folks fail. Some of you may remember a couple months ago when an old school classmate came by and stayed a month. He is a hopeless heroin addict, and also an avid socialist, which is neither here nor there, except for this. He certainly isn't a drug addict because he is a socialist, but he is a socialist because he was a drug addict. He needs the state to take care of him. He's a sinker. Throw him back in, and he'll sink again.
So sure, a system is needed to support the sinkers, or they drain on everyone else. Dave drained off of me for a month, and now he is draining off of someone else.

There are also people who fail not because they don't work as hard, not because they are inherently 'sinkers' but through bad luck. Frankly luck is a much larger factor in who makes it and who does not than you're letting on.
My uncle runs his own business; he's the model of your capitalist dream.
He's also the first to admit that he got where he is through luck. That's not to say he didn't work hard, or that he didn't need to work hard, that's to say he would have failed if the luck hadn't gone the other way. This "you make your own luck" nonsense is exactly that, BS spouted by the lucky few who made it who aren't prepared to admit that luck was a factor.
Quote:
A small amount of people generate the progress, and deserve the wealth.

Possibly, unfortunately the people who produce the progress, and do the work ARE not the one's that get the wealth.

I know you're final example of Iraqi oil is most likely what you call socialist, but I'm sorry DT is capitalist, twisted somewhat perhaps, but that is what happens to capitalism in the real world.


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Tuesday, January 31, 2006 1:08 AM

CITIZEN


Quote:
No capitalist has ever advocated capitalism without the rule of law

Read Yulaws post, this is more or less what (s)he is suggesting. At least corporations free of the rule of law, because they've never been known to act immorally?
Quote:
And I’m not sure that the US is more capitalist then the UK. The last document I remember seeing that compare the economies of the US and UK seemed to suggest that there was greater economic freedom (i.e. more free market capitalism) in the UK then in the US. Of course these things are notoriously hard to measure and I imagine that whatever difference there is between the US and the UK probably falls in the margin of error. So it’s difficult and probably impossible to compare the two.

As a complete system the US is far closer to the free market capitalism that Yulaw is suggesting than the UK. In which case my point still stands, there is still more social mobility in the UK and less disparity between rich and poor than in America, so if Yulaw's supposition is correct and by implementing true free-market capitalism (in respect to corporations only though) we'll get a land of milk and honey, then how does (s)he explain this (at the very least seemingly) contradictory evidence?

I'm still waiting for the explanation as to how we'll suddenly have infinite wealth and resources so everyone can become rich and prosperous through the implementation of free-market capitalism.


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Tuesday, January 31, 2006 5:44 AM

DREAMTROVE


Fletch,

I basically agree with you here. I would just make one clarification that I should have said of my own position. I meant free market capitalism. Sure, state-run capitalism does exist in communist china, and did in nazi germany, but it involved govt. interference, ownership, and 'favored company status' which is what we are starting to get into with Clinton and Bush. I think is has to end now, because that leads towards organized evil. The point is to not have the bad apples have any more power than the other apples.

Citizen,

Quote:
Microsoft/IBM won against Apple, not because the IBM PC/Windows is better than Apple Mac/OS but because Microsoft and IBM stole Apples ideas and repackaged them as their own. They then pushed through numerous counter-claims that stopped Apple from effectively taking legal action to protect their intellectual property.
What we have today is the IBM PC (which is architecturally inferior to comparative Macs) and Microsoft Windows (which is inferior to just about every contemporary OS there is).


This just isn't so. The Mac was designed by microsoft and MS programmers for Apple and it was a copy of the xerox star OS. Microsoft was then hired by IBM to make OS 2. The MS developed their own windows os. Microsoft can't steal an idea that was theirs to begin with. But that's not the point, the point is the idea of GUI survived, an idea which never would have come into being without competition. Arguing that mac is superior technically to ibm is an iffy proposition at best, and might be blatantly false, but again, it's not the point. The IBM was evolutionarily superior because it was open architecture, and the apple closed-shop system was less competitive because it did not lend itself to competition. This is why it failed, and lost marketshare to the PC.

Quote:

I'm sorry dreamtrove but to me this sounds just like "All we have to do is share the wealth and the socialist state will rise and everyone will be living in a land of milk and honey". The fair never win out if there are people around prepared to cheat.


I meant, without govt. intervention on their behalf, companies with fair labor practices tend to win out evolutionarily because they are more efficient. I don't need to argue the point because 300 years of history has already shown it to be the case. The corrupt oppressive corporate models of the past are just about all gone, because in a free society, people will choose not to work for companies that don't treat them well. Sure, this stuff still happens in the third world, but in countries that become freer, this again disappears. Sweatshops used to abound in japan and korea, but now no one in either country would work for them, so capitalism there evolves as well. In another decade you will see sweatshops disappear in the Phillipines and India. In a socialist state, bad labor can persist because there are no other employment options.

Quote:
I fail to see how a new starter could ever hope to compete with an established competitor who can do ANYTHING they want in order to stay on top of the pile.


Try it some time. You'd be surprised. It's not that hard, and they don't beat you over the head or kick you out the door. Most people welcome competition. Most likely, if you become a threat to their business, they will just invest in you.

You make your luck. Luck is not a factor. I'm not one of the lucky. I'm one of the unlucky. I used to believe that it was some random fate. Now I know it's me. I f^&ked up, and so I lost, many times. No luck. But this isn't the point. Some folks will fail, that's life, that's why you need some sort of failsafe, a safety net. Honestly, I don't really care about the people who fail, I'm not out to save them, I've known a large number and I think they really earned that failing, but we have to care for them because otherwise they turn to crime and basically screw everything up for everyone else. I think the dole is a decent way of dealing with it. I'd prefer a credit system that allowed them to purchase goods or services from merchants and providers, but not drugs and alcohol, which is what, statistically speaking, most of them are doing, well over 90% of the time. My sister works with disabled vets. A few are unlucky, sure, they got poisoned by some chemical weapon, went to their head. Most of them poisoned themselves with cocaine marijuana and liquor. But these guys fail an alarming percentage of the time.

My point on the Iraqi oil was not socialist vs. capitalist. I think it's a mixture, socialists in govt. think tanks supporting policy that corrupt capitalists are taking advantage of, but that's not the point. What I said was, this is govt. Govt. is responsible for the Iraqi oil theft opportunity that corrupt capitalists took advantage of. Without govt. to do the work, the work it's profitable. Ergo, govt. should stay out of the private sector. What I'm saying is what we need is separation of corporation and state.

BTW, I erred in my thing, those were quarterly earnings for exxon, not annual, so multiple all my cash cow figures by four, divide the year total by four to make it 30 years. Iraqi oil might last 30 years, but it's still far from a profitable plan.

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Tuesday, January 31, 2006 10:38 AM

FLETCH2


Quote:
Originally posted by dreamtrove:
Citizen,

Quote:
Microsoft/IBM won against Apple, not because the IBM PC/Windows is better than Apple Mac/OS but because Microsoft and IBM stole Apples ideas and repackaged them as their own. They then pushed through numerous counter-claims that stopped Apple from effectively taking legal action to protect their intellectual property.
What we have today is the IBM PC (which is architecturally inferior to comparative Macs) and Microsoft Windows (which is inferior to just about every contemporary OS there is).


This just isn't so. The Mac was designed by microsoft and MS programmers for Apple and it was a copy of the xerox star OS. Microsoft was then hired by IBM to make OS 2. The MS developed their own windows os. Microsoft can't steal an idea that was theirs to begin with. But that's not the point, the point is the idea of GUI survived, an idea which never would have come into being without competition. Arguing that mac is superior technically to ibm is an iffy proposition at best, and might be blatantly false, but again, it's not the point. The IBM was evolutionarily superior because it was open architecture, and the apple closed-shop system was less competitive because it did not lend itself to competition. This is why it failed, and lost marketshare to the PC.


Patently and demonstratably false. The Mac was a project developed entirely in house by Apple who when they started the project were the biggest manufacturer of home computers. Hardware design was by Burrell Smith, software design was done by a team of people including a few that had worked at Xerox.

Microsoft at that time was just a software company and were approached by Apple to write applications. Since the machine was new Apple had to give Microsoft prototypes and in some cases source code to allow development of the Microsoft products on time. That was the basis of some of Apple's later lawsuits, that IP transfered under none disclosure agreements had been used by Microsoft to make Presentation Manager for IBM OS/2.

http://www.folklore.org/StoryView.py?project=Macintosh&story=A_Rich_Ne
ighbor_Named_Xerox.txt&topic=Microsoft&sortOrder=Sort%20by%20Date&detail=medium

and as you like wiki

http://en.wikipedia.org/wiki/Macintosh_128K

I think you may be confusing this case with the IBM case over OS/2 where IBM effectively said that Microsoft Windows benefited from work-for-hire contract work that Microsoft had done for IBM.





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Tuesday, January 31, 2006 11:20 AM

FLETCH2


Reminds me of a story, which may illistrate Citizen's point but no matter. It's to do with Bill Gates. I must prefix this by saying I'm not a "Gates hater" I think a lot of the flack the man gets is just nerd envy. Truth is he built the first successfull independent software company from next to nothing, including coding stuff himself in the early days. In my opinion he paid his dues, he should get the rewards.

Doesn't mean he's consistant though.

Back in the early days of home computers it was hard to get them to do much of anything. There wasn't a lot of RAM memory to be had, and even if the hardware was there you had a hard time finding or writing software to exploit it. It was very much a hackers hobby, people exchanged code and hardware ideas fairly freely. If you went to the right Bay area clubs the Woz would give you a copy of his Apple 1 design so you could wire wrap your own. Back then few people worried about IP.

Except Bill Gates.

Microsoft in the early years made most of its mony selling basic. In fact MS Basic was about as close to a "standard" anything as these home computers ever got. MS would be approached by companies building new machines to provide a semi custom version of MS Basic which was often integrated into the machine's ROM. Now at that time ROM was cheap and RAM expensive, so often the ROM routines were far bigger than anything you could write yourself. In addition to make it easier to port from one machine to another (and help reduce size) MS structured Basic into a number of callable subroutines many of which did usefull things you would like to do in other programs. Wasn't long before hackers discovered this and started using calls to the Basic ROM in their own programs. Of course to do that you had to know what the calls were and how to use them. To help you do this you could buy books from people that had figured out the calls -- programming books.

There is an interview for a Radio Shack home computer journal from around 1979 with Bill Gates. Bill at that time was the pimply faced kid you sometimes see in pictures. Probably in this really early 20's long before Windows or IBM asking for MSDOS nack in the days when he signed MS checks himself.

All is going great until the interviewer, talking "geek to geek" decides to ask Bill about some aspect of the Ratshack Basic ROM. At this point Bill goes completely off topic, demanding to know how he knew about that etc etc. The interviewer tells Bill it's in a Basic systems call book he bought. Bill is livid, "This guy is ripping us off this is Microsoft property he's selling!"

And he probably has a point.

However contrast this with what Bill Gates said to Steve Jobs when Jobs discovered that MS was launching Windows. "Look Steve it's like this, we both have a rich neighbor called Xerox and one day I break in to steal the TV set only to discover you'd stolen it first."

Observation: In Bill's mind it was bad for people to steal from MS but not for MS to steal from other people. Which probably explains just why he managed to develop a successfull company when others failed.

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Tuesday, January 31, 2006 11:59 AM

CITIZEN


Dreamtrove:
Mac OS stuff:
Your wrong, but most of what I could give has already been cited by Fletch so I won't go over it again. The point is that it is more often the most ruthless, not the most efficient or best product that survives. It could have easily been Beta max vs. VHS, for instance.
Quote:
Arguing that mac is superior technically to ibm is an iffy proposition at best, and might be blatantly false, but again, it's not the point.

I think it is the point. The most efficient and better product was sidelined for the one that is supported by the more ruthless group.
Secondly trust me on this, the proposition that the Mac architecture is better than the IBM x86 is far from iffy.
Quote:
I meant, without govt. intervention on their behalf, companies with fair labor practices tend to win out evolutionarily because they are more efficient.

Except time and again the most ruthless companies win out over the most efficient.
Quote:
I don't need to argue the point because 300 years of history has already shown it to be the case.

I don't know how to say it other than: no it hasn't.
Quote:
The corrupt oppressive corporate models of the past are just about all gone, because in a free society, people will choose not to work for companies that don't treat them well.

No, dreamtrove. You're stating this like it happened on its own because that's how it works, unfortunately you're forgetting that over the last 300 years we've gone from having no labour laws to many. Companies treat their work force better now not because it's better for business, but because they have no choice.
It's not despite government controls, it's because of them.
Quote:
Sweatshops used to abound in japan and korea, but now no one in either country would work for them, so capitalism there evolves as well.

They abounded in Britain as well, until they were made illegal.
Slavery ended in the western world because it was made illegal, not because it was bad for business.
Quote:
In a socialist state, bad labor can persist because there are no other employment options.

Bad labour practices abounded in the free market capitalism of the 19th century because people had no choice as well DT. Please don't tell me they weren't really capitalist because they were.
Quote:
Try it some time. You'd be surprised. It's not that hard, and they don't beat you over the head or kick you out the door. Most people welcome competition. Most likely, if you become a threat to their business, they will just invest in you.

Yes I'm sure if you started to threaten a big corporation which in an environment that had no imposed rules would be the law, they'd be more than happy to play by the rules. Problem is DT they don't now, and that's with measures in place to force them to do so.
Quote:
You make your luck.

Well that's not what my uncle, one of those self made men who embody the capitalism you talk about, says.
I personally happen to trust what he says about his life.
Quote:
Most of them poisoned themselves with cocaine marijuana and liquor.

Fighting men have turned to drugs and alcohol to escape the rigours of war since before the Romans. It's a natural human reaction to a situation far more stressful than any wealthy CEO will ever experience. The reaction that they brought it on themselves and are now expendable after they've been used up fighting the wars of the wealthy is fairly predictable.
Quote:
I think it's a mixture, socialists in govt. think tanks supporting policy that corrupt capitalists are taking advantage of, but that's not the point.

The argument that capitalism doesn't fail, its socialists corrupting it, doesn't persuade me anymore the more I hear it. Capitalism fails on its own merits, just like socialism.
Your argument sounds just like that of the socialist and communists who blame the collapse of socialist and communist societies on capitalist conspiracies.
Quote:
Ergo, govt. should stay out of the private sector. What I'm saying is what we need is separation of corporation and state.

Well like I said we pretty much had this in previous centuries, and it didn't workout so well.
To use your argument against socialism, we tried it, it didn't work, time to move on.


More insane ramblings by the people who brought you beeeer milkshakes!
The statistics on sanity are that one out of every four persons is suffering from some sort of mental illness. Think of your three best friends -- if they're okay, then it's you.

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Tuesday, January 31, 2006 9:09 PM

DREAMTROVE


Quote:
Patently and demonstratably false.


I was working for my father at the time as an ass. editor for his syndicate column. He knew guys at apple and microsoft, and had met gates more than once. I distinctly recall apple hiring microsoft people to help, and I am certain IBM contracted microsoft for OS2. I'm certain of all of it actually, I'm not stabbing in the dark here.

Secondly, it's not surprising that Microsoft worked on apple's OS, they had written apple's first OS. Gates had been kicked out of the so called homebrew club for attempting to sell software to other members, and jobs and wozniak had approached him outside the club circle to buy said software, beginning a partnership that would last for many years.

It was microsoft's work with apple, and I wasn't saying it wasn't an inhouse apple deal, it was, but with microsoft programmers helping, that made IBM go to Microsoft for the deal to make OS2. If this had never happened, they would have gone to DR who had already invented their desktop gui derived from the xerox star system.

I'm not swearing by this, but this is certainly what I recall happening at the time. MS was more than a software house, but they were not yet taking sides of the IBM clone makers, and were perfectly happy to help apple, a client and customer, not a competitor.

All of which doesn't touch the point that capitalism is the competition of ideas, and the idea of the xerox star gui survives, and has even spread to linux, even if the xerox star itself is long gone from the marketplace.

Yeah, Bill stole form everyone. This was the business model though, and now we just accept it. Want to make you're site better? Take code from other people's sites. That's fine, code has no intellectual property value, I accept that.

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Tuesday, January 31, 2006 9:43 PM

DREAMTROVE


Citizen,

Quote:
Your wrong,

I was there. I doubt I'm wrong. I was just using that collaboration which did exists to mention that it did, but again, it's not the point.

Quote:
It could have easily been Beta max vs. VHS, for instance.

There were all sorts of data integrity issues, and then there's simple marketing flaws. Sony had a proprietary model, like apple, the company controls everything, very not-open source, not-free market, and that model fails.

Quote:
Secondly trust me on this, the proposition that the Mac architecture is better than the IBM x86 is far from iffy.


I don't have to trust you on this. I did assembler programming. I'm aware of the advantages of the motorola model, but I also know the disadvatages. The fact is that in almost no time at all, intel, having invented the chip, (spare the fairchild argument, intel is the fragment of fairchild that created the chip), delivered so much power so fast that the single function intel chip vastly outstripped the multi-function motorola in sheer power. It was also easier to develop, and dev time is also part of the equation.

Quote:
Except time and again the most ruthless companies win out over the most efficient.


They sometimes win out over superior product ideas, but those ideas usually come back to haunt them, once the issue of competition is out of the way. They seldom trounce more efficient companies.

Quote:
It's not despite government controls, it's because of them.


Govt. is actually hindering the situation. Govt. created regulations to enforce slavery, and unions and taxes. It's hardly helping the common worker. In the absence of govt. control, wages would go up, not down.

Quote:
They abounded in Britain as well, until they were made illegal. Slavery ended in the western world because it was made illegal, not because it was bad for business.


Slavery was always bad for business. We're talking about a free society, where govt. protects the rights of the people and does nothing more, like the founding fathers said it should. Under such a system, no one is going to go on to the plantation to pick cotton unless he is paid and treated well. If govt. isn't there to help you enforce slavery, but instead is protecting the rights of the people, it's going to be very hard to talk a man with free will into enslaving himself. It's going to get harder if the man is educated, not on drugs and not devoid of marketable skills.

Quote:
Bad labour practices abounded in the free market capitalism of the 19th century because people had no choice as well DT. Please don't tell me they weren't really capitalist because they were.


Why not? The socialists always say "oh it wasn't really socialist." Anyway, I'm not saying that, I'm saying the societies weren't free because people weren't being protected from the threat of violence, and often the govt. was the arm of the threat of violence.

Quote:
Yes I'm sure if you started to threaten a big corporation which in an environment that had no imposed rules would be the law, they'd be more than happy to play by the rules. Problem is DT they don't now, and that's with measures in place to force them to do so.


Men aren't angels. All govt. needs to do is keep people from hitting each other over the head with shovels. If hitting someone over the head with a shovel is profitable, lawless people will do it, just as they will do it if it gets them laid, makes them live longer or helps their family gain a larger share of the land. This flaw isn't unique to capitalism, it's part and parcel of human nature.

Quote:
Fighting men have turned to drugs and alcohol to escape the rigours of war since before the Romans.



Actually, and I except her judgement on these things, a fair number of these guys had these problems before they joined the military. The momma army guys. But for some, sure, you're right.

Quote:
The argument that capitalism doesn't fail, its socialists corrupting it, doesn't persuade me anymore the more I hear it.


That sure wasn't the argument. Govt. enables the corrupt to profit by spending someone else's money. The corrupt are always present. Capitalism doesn't change people. People were already flawed. The reason socialism is a disaster, and it's an unmitigated disaster, and this is absolutely the reason, above all else, is that socialism *believes* that it can change people. It can't. Nothing can.

Ergo, govt. should stay out of the private sector. What I'm saying is what we need is separation of corporation and state.

Quote:
Well like I said we pretty much had this in previous centuries, and it didn't workout so well.


I don't think we did, for centuries. We tried it somewhat, and it worked fine. It didn't lead to genocide, which gives it one up on the competition. And don't give me 'slavery is capitalism' because where's the money in being a slave? slavery is statism, as witness it was an institution of the democratic party. John Quincy Adams, founder of the first republican party tried hard to get rid of it, and Lincoln succeeded. And the republicans were always the free market capitalists. The pro-govt. folks and of course the corrupt corporates, wanted it. Anyway, TR, Taft, Coolidge, Eisenhower, lot's of hand's off laissez-faire economics. Those were good times. So the $ tell me. Hoover, FDR, Johnson, those were hands on economics. Not so good times. So the $ say.

We're not likely to agree on this point. The point of debate is to reach agreement, and as that's not likely to happen, I'm likely to drop it. I'm not saying fall in line. Just stating my case.

Which simply put, is this:

If Clinton hadn't given Halliburton a guaranteed govt. contract role in the military, Halliburton wouldn't be a problem. The same can be said for the drug companies, whose single biggest customer is the govt., so they bribe officials to change the legislation to favor their products, and become a problem, and the oil companies, who get free oil from the govt. This all has got to stop. I want govt. out of my capitalism, stem cell reasearch and all. When I look around the world at who has it better, it's not guys living under socialism, it's folks in Korea, Japan, India. China is doing well, but not a swell place to be if you want to be a free citizen.


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Tuesday, January 31, 2006 10:34 PM

FLETCH2


Nope, you are still wrong. Apple contracted MS to write applications, MS did no work on the core OS. Read the link I posted. The guy who was the MS liason to Apple kept insisting that they needed to know more about how the OS worked to have their applications ready on time so Apple gave them stuff, it was not the other way around.

I doubt that Gates would have claimed ownership of MacOS to you and then neglect to mention it in a multimillion dollar lawsuit that the future of his company hinged on. Nobody that worked on Mac says it's that way, nobody at MS said it was that way.

It's been documented a 1000 times til Sunday.

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