NationStates Jolt Archive


Corporatism != Capitalism

Texpunditistan
19-06-2005, 07:40
After having many, many discussions (especially during the election) over capitalism vs communism vs socialism vs populism vs blahblahblahism, I've noticed that a lot of people (especially communists and socialists) seem to be mistaking corporatism (a type of fascism) for capitalism. I have, for a long time, contended that "Corporatism != Capitalism" and I still stand by that assessment. Corporations, by nature, are a hindrance to Capitalism.

Since I don't always express myself correctly, I've decided to post an article that points out how Corporatism and Capitalism are *not* the same.

Read. Enjoy. Discuss. :)Capitalism is not corporatism

One-dimensional confusion

Capitalism, simply defined, is an economic system where the state has only the power to protect individual rights : or, from the individual point of view, where people have the freedom to trade with each other in all ways desired, without coercion. The implication of this is that the only existing state intervention in the economy is protective, not redistributive, and private systems fulfill the markets that are needed.

What this means in practice is that a lot of government waste and regulations which are problematic today, would no longer be a burden on the economy. Thanks to Friedman's Law, which states that private systems only cost half as much as public systems (mostly due to private motivation and competition), a part of the problems, poverty and general cost of living which we have today would go down. People would be free to economically assemble in the way they desire. And of course, since social freedom is dependant on economic freedom (and the reverse also), we would also see a lot more social freedom.

I must here make a small distinction. Libertarianism, of course, does not imply a particular economical system. However, capitalism is the most efficient and moral system, and therefore we tend to uphold the virtues of capitalism, as it would be finally possible in a libertarian system and no doubt many people would desire to keep it.

Corporatism, on the other hand, is the idea that society and the government should be led or influenced by corporations. Of course, this is not a perfect definition, since "corporations" is a collective entity. The objective way to interpret this is to say that corporatism is the rule of people who own corporations. This implies a disbalance of power between corporation owners and other people.

It seems difficult to understand why the two have been confused. While capitalism considers everyone equal under the law, corporatism tries to disbalance society towards corporation owners, just like syndicalism, its opposite, tries to disbalance society towards the "workers". The proper capitalist answer is that we don't care which corporate model wins, as long as it is done without coercion - that is, as long as the ideas are tested on the free market instead of imposed by the state.

Since corporatism is often decried as being against individual freedom, it is hard to understand why they have been confused. The source of the confusion may lie in the typical one-dimensional "right-left" thinking. Basically, the consequences of this is that we tend to dichotomize political systems and this influences our whole way of thinking. For example, communism and fascism are seen as opposite, but to a libertarian they are both extreme forms of statism.

But this also places corporatism and syndicalism as the only two possible options. And since it is more obvious that capitalism is not syndicalist, it seems that the only way to make it fit in the model is by assuming it is a form of corporatism. Most liberals, who see "the enemy" in capitalism, and many conservatives, who see capitalist as a divisive element, are seeing politics thru their limited one-dimensional lens.

While in this article I discuss corporatism as anti-capitalist, I do not mean to say that syndicalism is good. Both notions are based on the inherently offensive and false notion of "class struggle", which is based on nothing except prejudice and the assumption that vertical mobility in the economy is irrelevant. In libertarian theory, the two-dimensional model of the Nolan Chart replaces the outdated one-dimensional model (for more information on the Nolan Chart, see this outside page).

Capitalism is not a system biaised towards any group of people, but emphasizes on a level playing field for all to progress in.

Good greed, bad greed

The disadvantages of corporatism are obvious. The main one is to give political power to a group of people. This tendancy is manifested in today's pressure groups, which often include big corporations. These corporations can manipulate the system to obtain results which are incongruous with the free market, as for example Microsoft and the Digital Millenium Copyright Act, which prevents its corporate customers from switching easily from Windows to another system.

There are side-effects of this tendancy also. One blatant example is the notion of "moral person" - that is, that a corporation may be given a personhood. This is, of course, blatant collectivism, but most importantly it twists the notion of justice and personal responsability. It whitewashes corporate crime by putting its burden on an abstraction, instead of real people.

Now, corporatism may have its flaws, but the objection might be raised that some bad sides of corporatism also apply to capitalism. We must dispell this idea if we are to establish the distinction and supremacy of capitalism over corporatism. The fundamental argument behind every of these examples is that, as explained before, capitalism is not a system biaised towards any group of people, but emphasizes on a level playing field for all to progress in.

The most popular argument is that of "wage slavery". I have already addressed this argument in many places (for example, see the second-to-last section of An evaluation of capitalism vs statism). The basic answer is that slavery by definition is the disrespect of individual rights. A slave is someone who does not own himself (and by extension cannot act freely or own freely). While slavery may be possible to a small extent in a corporatist system, such a thing cannot exist if individual rights are respected.

Another argument turns around the capitalist disapproval of minimum wage. This may be seen as a corporatist type of measure. The contrary is in fact the case : minimum wage and fair wage laws are politically profitable but create more unemployment for the poor. The consensus with economists is that young and unskilled workers are the most affected, and on the other hand, studies indicate that 62% of the people who benefit from minimum wages live with their parents, and therefore are already relatively well-off (Jason Clemens, Minimum Wage Equals Minimum Opportunity, 1999). Capitalism permits everyone to be free to fix their own prices without bias, and thus does not hurt any group of people.

Another important argument I want to mention is monopolies. It is often argued that monopolies favour corporations, and that the capitalist distrust of anti-trust laws is unfounded. However, this is a miscomprehension of basic economy. Monopolies exist mainly in situations where either demand or offer is low - the usual cause is a lack of resources. In these situations, maintaining more than one company on that market is less effective because more overhead is needed for a relatively low quantity of products being moved.

Another situation is where a company offers a product that is superlatively better than its competitors. In such a situation, only corporatism makes problems, as the outpaced competitors can band together and get laws made in their favour - in a free market, there would be nothing to prevent the superior product from becoming dominant.

Greed is often decried as a human flaw. Yet there is good greed and bad greed. The former , which is an integral part of capitalism, appeals to the customer to buy his products and makes profit from what it gives to society : the latter, the staple of corporatism, grapples with others in order to get laws passed in his favour, and uses coercion as his method of profit. One must be wary of not confusing the two.

Source (http://www.libertarianthought.com/main/corporatism.html)
Consilient Entities
19-06-2005, 07:53
While I personally am a capitalist, I find this article quite similar to the last feeble attempts to defend Marxism from what it becomes in the real world.

You simply can't compare capitalism (an ideal economic form, like Marxism) with a real-world working approximation. And you sure as hell can't use the comparision to defend the ideal.
Karuchea
19-06-2005, 08:04
Fascism is a form of government, not an economic form. It espouses Corporatism, which is a far right-wing form of Capitalism. Fascism itself (outside of Italy) and Corporatism can be described as reactions to Socialism. The victory of the Socialist Revolution in the USSR produced a reaction by the rightwing which played off of the fear of the spread of Communism. Mussolini played on this very much as did Franco. Corporatism itself at least in the 1930s form is a reaction to Socialism and the Great Depression. Corporatism provided a safe form of Capitalism compared to the old form which had crashed and burned.
Leonstein
19-06-2005, 08:27
I guess Corporatism is just the natural consequence of capitalism.
In competition, you end up with winners, who then have more power than new entrants, beat them, have even more power and so on.
The fundamental mistake of capitalism is the total lack of appreciation of anything that happens outside the market. That's why real capitalism fails to provide social security, fails to provide for market failures and externalities, and ends up having corrupt monopolies vying for political power as the consequence.
Jabba Huts
19-06-2005, 08:32
I think the middle east could teach us a thing or two about capitalism, their economies growing and diversifying. Oil is not the only thing the sell now.
Swimmingpool
19-06-2005, 13:28
Capitalism is not corporatism
Certainly, in the same sense that extreme socialism is not totalitarianism. That is, in theory on paper capitalism is individualist rather than corporatist, but every time it has been tried, corporatism results.
Pure Metal
19-06-2005, 13:36
Capitalism is not a system biaised towards any group of people, but emphasizes on a level playing field for all to progress in.
people are not born equal. communism is the only way to ensure this

anyway this is more of a tag than an arguement... i'm off for a few hours
Jeruselem
19-06-2005, 14:00
I do agree with Texpunditistan.
The pure economic models say Pure capitalism is not the US market system.
A bunch of big Corporations running the show is Oligolopy - if small business controlled the market, then it's closer to the pure model.
Laenis
19-06-2005, 14:14
Capitalism is not corporatism but it just leads to it. Say a new country is started with everyone at an equal base, and capitalism as the economic model. In the first few generations, some through luck or skill would become far more successful than others. Eventually the more successful corporations get more and more power and create barriers of entry into their particular market and force others out of buisness. Since the government put no regulations on this, no one can stop it and eventually a few monopolies have control of the economy, crushing any potential competition in the bud. Liberatarians moan about the government having too much power, but I would far rather be controlled by a government who might possibly have at least a vague interest in promoting social utility as opposed to a handful of corporations who care for nothing but profit and view morals as barriers to said profit which must be overcome.

Of course in pure capitalism a lot of talent is wasted. The rich can afford a good education for their children whilst since there is no state education the poor get none, so even those who are the most naturally gifted and hard working fail in life whilst the educated but not too bright and possibly lazy succeed. Just look at Bush - you think if he had being born to a working class family and gone to a state school he would have had a chance at becoming president, or even remotely successful? Liberatarians argue that people should be free to give their kids a massive head start in life, but ultimately it just means those born into a poor family have no chance to succeed whatsoever whilst the rich will succeed regardless. But, then again they are not concerned with that - the rich are inherantly superior and the reason people are poor is because they are stupid, right?
Neo-Anarchists
19-06-2005, 14:53
I always get annoyed when people put Fascism and Naziism at the far-right. I agree that corporatism is a different system than is capitalism.
Santa Barbara
19-06-2005, 15:09
I would far rather be controlled by a government who might possibly have at least a vague interest in promoting social utility as opposed to a handful of corporations who care for nothing but profit and view morals as barriers to said profit which must be overcome.

Hmm. Interesting choice. Me, I'd go with the corporations. Last I checked no corporation has taken to executing people by the thousands or millions, but it's pretty standard fare for a 20th (and 21st no doubt) century government. A corporation would recognize it as profitable to make sure business partners - and the consumers on which profit depends - are alive and well, otherwise they'd lose business. A government extracts it's profits by force through taxation (they eventually find, arrest and imprison you if you try to avoid paying taxes), not willing trade, so it has no interest in keeping anyone happy. Or alive. It can just tax death itself. Or births. From that perspective the corporation is far nicer, and even offers employment (government offers employment too, but that employment is the military. I prefer jobs where people are not shooting at me.)
Letila
19-06-2005, 15:53
Capitalism, even without the huge corporations, is still authoritarian an exploitive, just on a smaller scale.
Santa Barbara
19-06-2005, 15:57
Capitalism, even without the huge corporations, is still authoritarian an exploitive, just on a smaller scale.

How? What exactly is authoritarian about it?

I know I'm going nowhere with this, as your lifes motto practically hinges on how evil and exploitive free enterprise is, but... I fail to see how a small business could possibly be seen as being authoritarian. What the hell kind of authority does it even have?
Letila
19-06-2005, 17:02
How? What exactly is authoritarian about it?

I know I'm going nowhere with this, as your lifes motto practically hinges on how evil and exploitive free enterprise is, but... I fail to see how a small business could possibly be seen as being authoritarian. What the hell kind of authority does it even have?

Actually, small businesses usually do have some kind of hierarchy, don't they, and can you name any examples of a modern economy run completely by small businesses? (Yes, I know anarchism hasn't been tested, but since it does have a much better goal, I would try it over your idea).
Santa Barbara
19-06-2005, 17:09
Actually, small businesses usually do have some kind of hierarchy, don't they, and can you name any examples of a modern economy run completely by small businesses? (Yes, I know anarchism hasn't been tested, but since it does have a much better goal, I would try it over your idea).

Yes, small businesses do have some kind of hiearchy. So do families. So do groups of friends. Hiearchy does not = exploitation or authoritarianism. To describe any system where there evolves a hiearchy as authoritarian, is to completely ignore what authoritarianism actually is.

I can't name a national economy consisting completely of small businesses, no, but then again it was your contention that even IN such a case, ("on a smaller scale"), capitalism is authoritarian and exploitive.
Vittos Ordination
19-06-2005, 18:00
The sentiments of this article are true, even if they are not too heavy.

Any efforts made by government to benefit corporations at the expense of the labor would be counter to a capitalist system. However, you will not convince any socialists/communists on here with this. They are not worried about government instituted corporatism, they feel that without government intervention, capitalism will fall into corporatism naturallly.

If you have an article that shows why that won't happen, please post it. You might not convince the communists but at least I will have some more ammo for future debates.
Texpunditistan
19-06-2005, 18:11
If you have an article that shows why that won't happen, please post it. You might not convince the communists but at least I will have some more ammo for future debates.
While not exactly what you requested, I found another interesting article. (I'm still searching for an article/paper like the one you are suggesting.)
Corporatism and Socialism in America
by Anthony Gregory, Posted February 23, 2005

Principled advocacy of the free market requires an understanding of the differences between genuine free enterprise and “state capitalism.” Although the Left frequently exaggerates and overemphasizes the evils of corporate America, proponents of the free market often find themselves in the awkward position of defending the status quo of state capitalism, which is in fact a common adversary of the free marketer and the anti-corporate leftist, even if the latter misdiagnoses the problem and proposes the wrong solutions.

Indeed, corporatism, implemented by the state — whether through direct handouts, corporate bailouts, eminent domain, licensing laws, antitrust regulations, or environmental edicts — inflicts great harm on the modern American economy. Although leftists often misunderstand the fundamental problem plaguing the economy, they at least recognize its symptoms.

Conservatives and many libertarians, on the other hand, frequently dismiss many ills such as poverty as fabricated by the left-liberal imagination, when in fact it does a disservice to the cause of liberty and free markets to defend the current system and ignore very real and serious problems, which are often caused by government intervention in the economy. We should recognize that state corporatism is a form of socialism, and it is nearly inevitable in a mixed economy that the introduction of more socialism will cartelize industry and consolidate wealth in the hands of the few.

Leftists usually understand how wartime provides politically connected corporations with high profits and cushy contracts. What is more often neglected is that the history of the American domestic welfare and regulatory state also corresponds closely to the rise of corporatism. It is no coincidence.

Corporatism versus liberty in the 19th century

Throughout the 19th century, the two major political traditions in America offered authentically different views on the proper roles of government. The classical liberals, typified by Thomas Jefferson early on, had their political outlet in the Democratic Party, which, for the most part, stood on the side of limited, constitutional government and individual rights. Those who believed in a strong central government, typified early on by Alexander Hamilton, found their political home first in the Federalist Party, then in the Whig Party, and then in the Republican Party, the last of which openly embraced the doctrine of big government throughout the 19th century.

For about a hundred years the Jeffersonian tradition was mostly associated with the cause of the common man, whereas big government was often associated with monopoly privileges and big business. Hamilton and his philosophical progeny fought perennially for central banking, high tariffs, and subsidies to corporations to build “internal improvements.” Hamilton’s first major successor, Henry Clay, called this governmental corporate program the “American System.”

By the end of the 19th century, the so-called robber barons came to dominate much of the industry in oil and railroads. Misunderstood by nearly everyone, they were neither demons on earth nor flawless gods. They certainly were not a homogeneous group nor were they champions of pure laissez-faire capitalism. Most notably, the federal government empowered the railroad tycoons with eminent domain, forcibly taking privately owned land and giving it to the railroad companies. That was not the free market at work.

The Progressive Era

The Left has often hailed the Progressive Era as a time when, for the first time, Hamiltonian means — big government — were used to achieve Jeffersonian ends — the dignity and respect of the common man. In fact, the Progressive Era was a time in which both corporatism and socialism received major steroid injections.

Corporate interests pushed through the most significant Progressive-Era government reforms in order to guarantee profits, which they had been losing to smaller businesses that had emerged in the relatively free market of the early 20th century. Gabriel Kolko’s groundbreaking book The Triumph of Conservatism best advances this thesis of how the government expanded to accommodate, rather than curb, the interests of big business. Though a New Leftist, Kolko shows how political capitalists in every industry — from meatpacking to coal, from railroads to insurance — embraced the expanding regulatory state for their own gain — to push competitors out of the market and give government legitimacy to their companies.

Kolko shows how, in spite of the conventional history that characterizes the Progressive Party’s nomination of Teddy Roosevelt in 1912 as a response to the backwards laissez-faire William Howard Taft administration, in reality the party was favored by large businesses with whom Teddy Roosevelt had strong ties and whom Taft had alienated by failing to accommodate and empower through the regulatory state.

Perhaps no government reform has been more misconstrued as anti-business populism than the Federal Reserve, which was sold to the American people in 1913 as an agency to regulate greedy and irresponsible bankers. As Kolko and many others have shown, the Federal Reserve established a banking oligopoly, guaranteed bailouts for the big bankers, created new barriers to entry for smaller bankers, and was in fact designed by people representing some of the most powerful banking interests in the world, including the National City Bank of New York; Kuhn, Loeb & Company; J.P Morgan Company; and the First National Bank of New York.

The New Deal

Both Franklin Roosevelt’s admirers and his detractors often think of his New Deal legacy as generally socialistic. Like the Progressive Era, the New Deal is widely misunderstood: it did indeed attack the free market, but often did so at the behest of corporate interests.

Such interests were largely behind the emergence of the National Recovery Administration, which exemplified FDR’s economic central planning. Far from being a purely egalitarian agency, the NRA was largely modeled after the policies of Mussolini, who had yet to be considered an enemy by most Americans, but rather was still seen as an inspiration by many. As John Flynn explained in his book, The Roosevelt Myth,

[Mussolini] organized each trade or industrial group or professional group into a state-supervised trade association. He called it a corporative. These corporatives operated under state supervision and could plan production, quality, prices, distribution, labor standards, etc. The NRA provided that in America each industry should be organized into a federally supervised trade association. It was not called a corporative. It was called a Code Authority. But it was essentially the same thing. These code authorities could regulate production, quantities, qualities, prices, distribution methods, etc., under the supervision of the NRA. This was fascism. The anti-trust laws forbade such organizations. Roosevelt had denounced Hoover for not enforcing these laws sufficiently. Now he suspended them and compelled men to combine.

Though the NRA intended to guarantee profits through mergers and price controls — forbidding smaller business from competing by offering better prices — big business, big labor, and most other initial supporters turned against the NRA when it became universally recognized as a complete failure. In 1935 the Supreme Court found it unconstitutional. Aside from the NRA, other New Deal measures epitomized naked corporatism. The Agricultural Adjustment Administration cartelized the farming industry, and Roosevelt’s farm subsidies and price supports have to this day helped to solidify a corporate stronghold in American agriculture.

Corporatism and socialism in today’s America

In more recent years, corporate interests have often cheered on big government programs, often the same ones championed by those who consider themselves anti-corporate. In the late 1990s, the now-defunct Enron was one of the largest lobbying influences behind the international Kyoto Treaty, which would have forced the world to comply with a ghastly web of new regulations and would have meant large energy contracts for Enron, had the company not gone bankrupt. The antitrust breakup of Microsoft was a de facto giveaway to competitors such as Netscape. (One of the complaints about Microsoft was that it intended merging with AOL, a company with which Netscape has since joined forces.)

Bush’s farm subsidies are direct welfare for the biggest agricultural corporations, and his protectionist trade policies are indirect welfare for politically favored businesses. His recent expansion of Medicare has been both the greatest augmentation of the American welfare state in decades and a giveaway to large pharmaceutical corporations. If universal health care ever comes to America, the corporations are likely to stay intact but will no longer have to satisfy customers, only the politicians.

To convince the anti-corporate skeptic of the benefits of the free market, it is crucial to defend the legitimate systems of profit and private property, but it is also vitally important to make clear that America doesn’t have a free-market economy, and indeed many of the ills associated with free markets are actually the result of state capitalism — or socialist corporatism. That the expansion of government regulations, often done in the name of combating corporate excesses, is frequently supported most enthusiastically by corporate interests makes it all the easier to explain economic liberty to those who have become disenchanted with the current system and misattribute the problems to the free market.

Source (http://www.fff.org/freedom/fd0411e.asp)
Liverbreath
19-06-2005, 18:21
I always get annoyed when people put Fascism and Naziism at the far-right. I agree that corporatism is a different system than is capitalism.

Well actually they are the far right... of the left side of the scale. The left just convinently forgets that part.
Texpunditistan
19-06-2005, 19:17
Liverbreath']Well actually they are the far right... of the left side of the scale. The left just convinently forgets that part.
You're quite right. The problem is with the scale (left to right) is that it's incorrect in it's assertions. If it were truly honest, it would be:

<--collectivism/state regulation-----moderate-----individualism/liberty-->

(yes, that's a gross simplification, but I don't feel like opening photoshop and whipping up a chart to show where all the ideals sit on the scale. :p)

Also, I found a couple really great book on true Capitalism.

Rescuing Capitalism From Corporatism: Greed And The American Corporate Culture (http://www.amazon.com/exec/obidos/tg/detail/-/1418495549/qid%3D1113491306/sr%3D1-67/ref%3Dsr%5F1%5F67/002-9/103-4412615-5770208)

Bruges, Cradle of Capitalism, 1280-1390 (http://www.amazon.com/exec/obidos/tg/detail/-/0521819210/qid%3D1113491306/sr%3D1-69/ref%3Dsr%5F1%5F69/002-9/103-4412615-5770208)
Rixtex
19-06-2005, 19:37
I think the middle east could teach us a thing or two about capitalism, their economies growing and diversifying. Oil is not the only thing the sell now.

Not seeing any smilies in your post, I have to believe you were being serious here, and not being facetious.

So, name one ME nation with a growing, diversified economy.
Cadillac-Gage
19-06-2005, 19:51
Not seeing any smilies in your post, I have to believe you were being serious here, and not being facetious.

So, name one ME nation with a growing, diversified economy.

Easy. Israel.

aircraft, electronics, heavy equipment, precision machinery, firearms...
Rixtex
19-06-2005, 19:54
Easy. Israel.

aircraft, electronics, heavy equipment, precision machinery, firearms...

Ok, besides Israel. I should have excluded the obvious.
Leonstein
19-06-2005, 20:35
Indeed, corporatism, implemented by the state — whether through direct handouts, corporate bailouts, eminent domain, licensing laws, antitrust regulations, or environmental edicts — inflicts great harm on the modern American economy.
This article is written by a right-winger type capitalist though.
The suggestion that licensing laws, antitrust and environmental protection causes market failures is plain wrong. Those things are implemented because market failures happen, in this case a firm becoming too big (ie perfect competition turns into an oligopoly) and externalities.
Mallberta
19-06-2005, 20:45
Ok, besides Israel. I should have excluded the obvious.

I dunno if Morroco technically counts, but it has burgeoning electronics industry and is rapidly growing.
Texpunditistan
19-06-2005, 22:00
This article is written by a right-winger type capitalist though.
The suggestion that licensing laws, antitrust and environmental protection causes market failures is plain wrong. Those things are implemented because market failures happen, in this case a firm becoming too big (ie perfect competition turns into an oligopoly) and externalities.
Don't tell me you read the first couple paragraphs and dismissed the rest of the article. :headbang:

If you go on to read the complete article, it show HOW those things are detrimental to the economy...and how we were sold a lie with the New Deal and other corporate protection schemes disguised as help for the "working man".

America has been royally screwed because corporations are in bed with big government. It's not the fault of capitalism...it's abuse of power that's gotten us where we are.
Texpunditistan
20-06-2005, 05:36
bumptastic
Jello Biafra
20-06-2005, 10:44
I'd dissect both articles, but there's a lot there. While they're right on the surface, they also contain a lot of unsubstantiated and facetious comments and arguments. And I agree that capitalism isn't corporatism, I also agree with the earlier posters who said that capitalism would inevitably lead to corporatism.

America has been royally screwed because corporations are in bed with big government. It's not the fault of capitalism...it's abuse of power that's gotten us where we are.

True on both counts. But, of course, in capitalism money is power. Those with the most money have the most power. Surely you don't really think people with power are going to be content with the amount of power they have and not want more? (Okay, a few might, but most won't.)
Texpunditistan
20-06-2005, 17:05
Surely you don't really think people with power are going to be content with the amount of power they have and not want more? (Okay, a few might, but most won't.)
You've nailed the main problem with any type of government or economic system:

power + greed = abuse of power

or more correctly:

power - morality = abuse of power

So, what do we do? "Humanist" ethics have failed. "Secular" ethics have failed. Morality (in particular, religious morality**) has succeded when tried in conjunction with Capitalism...but religious morality has been branded "evil" by the Intelligencia and Intellectual Elites.

So, where does that leave us?

EDIT: ** - I'm not talking about the new neocon theocratic version of religious "morality", but true religious morality.
Sarkasis
20-06-2005, 18:10
Capitalism works well as long as...

1) Consumers have real choices (bad: conglomerates, monopolies, exclusivity agreements)

2) The economy/production is not too controlled by governments (bad: price control, quotas, fixed economy)

3) There is a middle class of workers-consumers (bad: a large social gap, generalized proverty, small ruling class, profit-hungry board of directors)


This definition was from my "hard-core capitalist" teacher in macro-economics (in college). He says that what's killing capitalism is a combination of: corporatism, government control, rich-poor gap.
Texpunditistan
20-06-2005, 19:34
Capitalism works well as long as...

1) Consumers have real choices (bad: conglomerates, monopolies, exclusivity agreements)

2) The economy/production is not too controlled by governments (bad: price control, quotas, fixed economy)

3) There is a middle class of workers-consumers (bad: a large social gap, generalized proverty, small ruling class, profit-hungry board of directors)


This definition was from my "hard-core capitalist" teacher in macro-economics (in college). He says that what's killing capitalism is a combination of: corporatism, government control, rich-poor gap.
Exactly...and corporatism and government control are what keep the rich-poor gap in place.
Mallberta
20-06-2005, 19:44
Exactly...and corporatism and government control are what keep the rich-poor gap in place.

I'm not sure about this. Most periods of low government interference resulted in a widening of the income gap. Conversly, the periods of higher interference (post-WW2 to mid-Seventies) did lead to converging income, though at a considerable price. So I don't think it's evident that free markets will reduce income gaps; quite the opposite, looking at history.
Leonstein
21-06-2005, 03:22
Don't tell me you read the first couple paragraphs and dismissed the rest of the article. :headbang:
.....It's not the fault of capitalism...it's abuse of power that's gotten us where we are.
1. No, I did read the whole thing, but in the end the idea that somehow these things wouldn't happen in "real" capitalism bugs me nonetheless.
I mean you learn about these market failures in Econ1010, in the very first intro course. It just happens.
2. That sounds an aweful lot like the people who defend communism. As I said, Communism has the basic assumption that people are good, and that they wouldn't be greedy. That's wrong, and that's why it doesn't work.
Capitalism has the basic assumption that there can be some kind of market independent of its' environment. Knowing that people are greedy and don't wish each other well, it's clear that people are going to try things outside the market (like politics) to change market conditions to what they want them to be.
Pure Capitalism is just as impossible as pure Communism.
If you try to implement Communism, you get "Socialist" Dictatorships, if you try to implement Capitalism, you get "Corporatism" ie Corporate Dictatorships (and that is really where the world is heading right now, with corporations having the power to gut a country just by leaving it when it implements unfavourable policies).
Jello Biafra
21-06-2005, 12:09
Morality (in particular, religious morality**) has succeded when tried in conjunction with CapitalismWhen was this?