does capitalism have within it the seeds of its own destruction?

Akrasia

A core principle underlying Marxist theory is that Capitalism is inherently unstable, and if left to its own devices, will ultimately collapse as workers revolt against the greed and exploitation of the capitalists.

Throughout the 20th century, there have been numerous instances where capitalist institutions collapsed through greed and corruption, and their collapse often presented a systemic threat to the entire economy in which they operated so much so that they necessitated bail outs from the public finances. (the wall street crash for one, Enron, the savings and loan scandal, the AIB bailout in Ireland, the current banking crisis, property bubbles and crashes in almost every economy in the world etc etc etc)

Marx anticipated that the collapse of capitalism would arise through workers revolution, but revolution doesn't seem to be required, merely a refusal (or inability) of the tax payers to indemnify the private capitalists against the risks that they take in the pursuit of their own wealth.

There are ultra capitalists out there who blame interference by the state for the failures of big business, but I would argue that if it wasn't for interference by the state in the first place, market capitalism would have collapsed by itself more than a hundred years ago.
The welfare state that libertarians are so opposed to is one giant insurance policy against worker revolt. Without minimum standards of living for workers in modern liberal democracies, it is inconceivable that there would have been such economic and political stability in the developed world in the latter half of the 20th century

af_thefragile

The caption at the bottom of your post sums it up.

Akrasia

af_thefragile wrote: »

The caption at the bottom of your post sums it up.

could you clarify that please?

hobochris

af_thefragile wrote: »

The caption at the bottom of your post sums it up.

The OP's comments are well thought out, unlike your comment which IMO reflects the head in the sand style ignorance of many in Ireland pre recession(I.e. sure we're different,property crash? it'll never happen to us).

The Op highlights some interesting points about Capitalism, It is flawed, Its only a matter of time before workers have enough of the greed and stop dancing to the tune of the fat cat.

Its only a matter of time before the debt is called in and the **** really hits the fan. Then people will start to question this System.

The Corinthian

Akrasia wrote: »

A core principle underlying Marxist theory is that Capitalism is inherently unstable, and if left to its own devices, will ultimately collapse as workers revolt against the greed and exploitation of the capitalists.

There are two arguments there, firstly that Capitalism is inherently unstable and secondly that it will collapse as a result of a 'workers revolt'.

Capitalism is certainly unstable in that it is prone to a boom-bust cycle. Of course, if you look at the longer term view - over multiple cycles, you do see an 'ant hill' syndrome (knock over an anthill and the ants will rebuild it better than before) forming - the bust lays waste, the market adjusts to this, rebuilds and the cycle begins again. Both the welfare state and market regulation, came out of the 1929 crash and the depression that followed.

Whether such a Darwinistic approach to economics is good, is another matter. If not one needs to find a viable alternative or reform the present one, and as things stand, the latter is the more likely solution.

The second point is that of the fabled 'workers revolt'. Sorry, but Marx got that one wrong. He's been pretty extensively debunked on a lot of his economic theory over the last century; especially where it comes to his various labour related theories (value, elasticity, etc). The revolution never came, ultimately because nineteenth century Capitalism became twentieth century Keynesianism, and in a century from now, it will become something else again.

TBH, whenever I hear Marxist theory being quoted, I tend to wonder how it is still being drawn upon with such quasi-religious orthodoxy. Marx contributed a lot to economic and political science, but the World has moved on, and much of what he suggested is either no longer relevant or frankly was false to begin with.

Akrasia

The Corinthian wrote: »

There are two arguments there, firstly that Capitalism is inherently unstable and secondly that it will collapse as a result of a 'workers revolt'.

Capitalism is certainly unstable in that it is prone to a boom-bust cycle. Of course, if you look at the longer term view - over multiple cycles, you do see an 'ant hill' syndrome (knock over an anthill and the ants will rebuild it better than before) forming - the bust lays waste, the market adjusts to this, rebuilds and the cycle begins again. Both the welfare state and market regulation, came out of the 1929 crash and the depression that followed.

Capitalism has to keep re-inventing itself everytime there is a bust, but this can only happen so many times before it is transformed to a state that can no longer be considered 'capitalism'.
In its purest form, capitalism never existed, but is has been successful in hybrid forms through various political and economic systems (from fascism to social democracy)
The primary definitive charactaristic of capitalism is the private ownership of capital. Surely there must come a stage where the 'debts' of the capitalists become so great that the public are no longer willing or able to cover them through increased taxes, and the bulk of the assets of the capitalists are either nationalised, or collectivised.

Whether such a Darwinistic approach to economics is good, is another matter. If not one needs to find a viable alternative or reform the present one, and as things stand, the latter is the more likely solution.

The second point is that of the fabled 'workers revolt'. Sorry, but Marx got that one wrong. He's been pretty extensively debunked on a lot of his economic theory over the last century; especially where it comes to his various labour related theories (value, elasticity, etc). The revolution never came, ultimately because nineteenth century Capitalism became twentieth century Keynesianism, and in a century from now, it will become something else again.

There have been many attempts at revolution, the problem is that there is a very strong tendancy for the capitalist state to violently suppress revolutionary movements from below.

(on small scale here, but on an international scale in latin america and the south pacific where 'the threat of a good example' has been countered by good old fashion brutal force)
This, by the way, is more a feature of totalitarianism than capitalism as an economic system, its often which ever side that holds the biggest army that decides what the economic destiny of the society

TBH, whenever I hear Marxist theory being quoted, I tend to wonder how it is still being drawn upon with such quasi-religious orthodoxy. Marx contributed a lot to economic and political science, but the World has moved on, and much of what he suggested is either no longer relevant or frankly was false to begin with.

I am not a marxist, I just chose that quote in the title because it is succinct. Marx envisaged that capitalism would be overthrown by the vanguard party of the people, but I believe that capitalism itself will be the source of its all downfall, the engine of greed and self interest will lead to capitalists overthrowing themselves and the revolution will be when civil society decides that enough is enough and we change how property and capital is owned and how decisions are made.

(that said, capitalism could just as easily collapse into the other kind of anarchy (the mad max scenario) but that's just pessimistic

Permabear

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af_thefragile

Alrite here's your proper answer.

Capitalism is the natural order of things.
Everything in the nature works according to how well one can use his recources to succeed. The slow and inefficient ones fail while only the best ones make it through.

You can't say the collapse of the markets over the past century means capitalism is doomed for failure. That is ignorance.
There were far more reasons why the markets collapsed than the intrinsic nature of capitalism and if you look into it, it was always interventionism and centralisation that led to the collapse of markets and businesses.


That aside, capitalism in its proper form, which is free market capitalism is the most natural form of market there can be. Person A develops a product x he thinks can help the community. He decides to start mass producing it and start selling it for a profit. After a while people realise they don't really need this product x, it has become too outdated, while at the same time person B sees this product and develops another competing product a. Now people have a choice to buy between product a or product x.
People chose to buy product a cuz its cheaper and more new. Person a now goes back to the drawing board to make his product better and comes out with a new product y which is cheaper and better than product a. People now start to buy person A's product and now person B is under pressure to develop a new product.
And so the cycle continues. And ultimately its the people who get to enjoy the progressively cheaper and better products.

Now tell me what's so freaking wrong about that?




Here do one thing.
If you are so anti-capitalistic, look around you and throw away everything that was created by a capitalist business.

I've herd enough of capitalism is crap, its doomed to fail rabble rabble rabble...
But none of these people once stop to see how much their lives have transformed over the years because of capitalism.
We'ld still be riding around on horses and using wood burning stoves if it wasn't for the technological advances that have come about in the previous century all because of capitalism.

Tell me one good invention that has transformed your life which originated from a communist or a socialist world??

af_thefragile

Akrasia wrote: »

Capitalism has to keep re-inventing itself everytime there is a bust, but this can only happen so many times before it is transformed to a state that can no longer be considered 'capitalism'.
In its purest form, capitalism never existed, but is has been successful in hybrid forms through various political and economic systems (from fascism to social democracy)

Just to reply to this one bit...

There is never a full market bust (worldwide).
Everytime someone is losing, someone else is gaining.

You think capitalism never existed? Everything since the begining of time was capitalism. It was just a different form of capitalism, but it was capitalism.
People used to make things so that they could get rewarded in return. There were merchants traveling from one country to another with their silk, spices, utilities etc to trade with people from different nations in return for something else while making a little profit.
That was capitalism.

There were doctors/alchemists who used to treat people in return for a reward/price. There were astronomers who used to chart stars and invent instruments that would aid navigation and time keeping in return for something else. That was capitalism.

You know what was the only thing apart from capitalism. It was slavery.
People being bought by others like lifestock, made to work hard all day in return of food and shelter. Yup, no one enjoyed that life.




Coming back to modern day.
Soviet russia stepped away from capitalism. It collapsed. China and N.Korea stepped away from capitalism, they couldn't progress too.
America was the definition of the free capitalistic society and it managed to become "the land of opportunity and freedom" were people strived to "live the american dream".
Also during the cold war, soviet russia and USA were competing for the "space race" which bought about great scientific breakthroughs. That was a type of capitalism too.
You think all of that was wrong? It was a mistake?
Free people shouldn't be able to invent things or provide services they can provide to others in return of a reward (profit)?



Modern economists have complicated the whole meaning and structure of capitalism, most of which to propagate their own ideals, that capitalism isn't what it means anymore.
Capitalism is very simple and basic. Its people exchanging commodities and services while making a little profit for themselves. Thats all capitalism is.

The Corinthian

Akrasia wrote: »

Capitalism has to keep re-inventing itself everytime there is a bust, but this can only happen so many times before it is transformed to a state that can no longer be considered 'capitalism'.

Why is it so important that we can ascribe such absolute labels to any particular economic system?

There have been many attempts at revolution, the problem is that there is a very strong tendancy for the capitalist state to violently suppress revolutionary movements from below.

Hardly a capitalist hallmark. Indeed, socialism has resorted to violently suppressing dissent on more than its fair share of occasions.

I am not a marxist, I just chose that quote in the title because it is succinct. Marx envisaged that capitalism would be overthrown by the vanguard party of the people, but I believe that capitalism itself will be the source of its all downfall, the engine of greed and self interest will lead to capitalists overthrowing themselves and the revolution will be when civil society decides that enough is enough and we change how property and capital is owned and how decisions are made.

I doubt there will be any 'collapse'. As you pointed out earlier, it is changing continually, so that what we consider to be capitalism today will differ from what will be considered capitalism in a few decades, just as the capitalism of Marx's time is a completely different beast.

(that said, capitalism could just as easily collapse into the other kind of anarchy (the mad max scenario) but that's just pessimistic

I would have said it was the product of a young and fertile mind.

I understand that it would be nice to see things in simple terms of left and right - socialism versus capitalism, but the reality is that it's not that simple. The real World is not so orthodox, and both capitalists and socialists have frequently been more than happy to borrow from each other as a matter of pragmatism.

The only people who seem to see these things in terms of ideological black and white, seem to be academics, happily cocooned in their universities, and those types who sit at the fringes of politics, selling papers at demonstrations.

dreamlogic

donegalfella wrote:

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The OP was not arguing in favour of communism, and specifically stated that he/she is not a Marxist. So why are you putting forward an argument against Marxism and communism here?

When businesses know that they can expect lavish bailouts from government every time they get into trouble, they will naturally adopt a rather different attitude towards assuming risk.

+1

Marx's theories have no currency whatsoever in modern economic thinking.

Whether or not an idea has currency in the establishment is a side-issue. You can't use this to support an argument that capitalism is indestructible.

"capitalism" is no longer an adequate descriptor of an economy in which a self-taught computer programmer can buy a €399 laptop and make a living from his own home.

But the vast majority of people could not make a living in this way; most people have no option but to rent themselves out for a low-cost wage.

That's why communist millenarianism is ultimately nothing more than a pipe dream.

Again. The OP was not arguing in favour of communism. He was simply pointing out the flaws inherent in the capitalist system itself.

af_thefragile

dreamlogic wrote: »

Again. The OP was not arguing in favour of communism. He was simply pointing out the flaws inherent in the capitalist system itself.

You can't just say one thing is bad without speaking about the better alternative.
Cuz good and bad are relative terms. They have little meaning on their own.

So you can't just speak about one model of society without comparing it to the other models.

dreamlogic

af_thefragile wrote:

Cuz good and bad are relative terms.

Who mentioned good and bad?

af_thefragile

dreamlogic wrote: »

Who mentioned good and bad?

The OP said capitalism seeds its own destruction.
Does that make capitalism good or bad?

dreamlogic

af_thefragile wrote:

The OP said capitalism seeds its own destruction.

The OP did not say this.
Your first post on the topic sufficed tbh.

Permabear

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dreamlogic

donegalfella wrote: »

This post has been deleted.

Education and motivation are certainly important factors in determining the sort of career options open to a person.
However at least two of the examples you mention here - computer programming, writing - are talent/aptitude based professions and cannot simply be "mastered" through education. Only a tiny minority of people could become successfully self-employed in these areas.

Aside from this, most people are constrained by a need to pay their bills every month. So for most, the option to take time off to pursue these activities is either non-existent or is just not practical.

Permabear

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silverharp

Akrasia wrote: »

The welfare state that libertarians are so opposed to is one giant insurance policy against worker revolt. Without minimum standards of living for workers in modern liberal democracies, it is inconceivable that there would have been such economic and political stability in the developed world in the latter half of the 20th century

If looking at a point of view , I have to ask myself, where is the lie. On the assumption that you cant build a legitimate system on a fraud, theft or lies, does the weffare state stand up? I'd have to say it scores poorly. Like a ponzi scheme it benefits the early entrants who conribute little and reap the most benefits. It normally involves theft and lies via the process of inflation, anyone who lived on fixed income benefits through the inflation of the 70's could vouch for that. It creates a moral hazzard in that people are encouaged to make sub optimal decisions in their lives on the basis that they will be bailed out by the state.
On a grander scale it creates instability in the system in that it is normally a one way system that grows in good times but does not adjust down in bad times, thus it risks bringing down the state via debt defaults etc.
Show me a system where a gov cannot borrow and cannot raise taxes above x% of the GDP and I'll vote for it.

Akrasia

donegalfella wrote: »

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Ah the 'any objective person' device.

You are cherrypicking your version of the free market and 'the masses' to only include the wealthy minority of this planet. For every middle class person living a life of luxury, there are many more who toil for slave wages to produce the raw materials that we use to supply our luxury.

You say any objective person would agree that capitalism brings happiness, and that may be true if you show them a golf club on a sunny day, but if you brought that same objective person to a cotton plantation or a sweatshop in a slum in india, would that objective person be compelled to reach the same universal conclusion?

The fact that there are such low wages in these countries is because they have no welfare safety net and there is a huge surplus of labour. The dynamics of the free market of labour produce misery and slavery, the only reason we have better standards of living here is because of the redistribution of wealth through social programs and taxation.

If people want to be self-employed—whether as a carpenter, car mechanic, computer programmer, or writer—all they need to do is master the requisite skills. Why is that so difficult? It isn't, really. It's simply that a lot of people have no interest in education or skills, and no motivation to do anything with their lives.

Another problem with the free market hypothesis is that it assumes perfect mobility of labour when the reality is very very different. If someone is a farm worker and doesn't like the conditions in that industry, its not like he can suddenly do a 4 year apprenticeship in caprentry overnight and set himself up as a se carpenter.

People make decisions about their future career based on their aptitude, and the market conditions that prevail at the time they make the decision. there are thousands of construction workers in ireland who were attracted by the availability of work in the construction industry during the market bubble, now demand has collapsed and there simply isn't enough work for many of these people (even at zero wages). Are you suggesting that these people, many of whom are in their later years can go and do a computer course and become self employed IT consultants?

When central banks and governments intervene in the economy as they have done over the past decade—first overstimulating it with expansionary monetary policy, and then bailing it out/re-stimulating it with enormous fiscal transfers—they effectively prevent a naturally self-correcting mechanism from functioning. Austrian economists, in particular, have been writing about this for years. But this destabilization is hardly due to "flaws inherent in the capitalist system." Get the government out of the economy, and capitalism functions very well by itself.

One of the most important mechanism in a competitive free market is that supernormal profits cause others to enter the market, driving prices down until the inefficiencies are driven out of the market. This mechanism itself is the primary cause of the boom bust cycles in markets

Its such an obvious feature of capitalism that it's quite amazing how 'libertarians' continie to place all of the blame for the market instability on the outside manipulator du jour.

Running Bing

hobochris wrote: »

The OP's comments are well thought out, unlike your comment which IMO reflects the head in the sand style ignorance of many in Ireland pre recession(I.e. sure we're different,property crash? it'll never happen to us).

The Op highlights some interesting points about Capitalism, It is flawed, Its only a matter of time before workers have enough of the greed and stop dancing to the tune of the fat cat.

What exactly is the difference between a worker and a fat cat?

For example if Im born into a working class family, work my balls of in school, get a good education then eventually after years of hard work get a good job that pays well am I a worker or an evil imperialist capitalist fat cat pig?

The problem with this country is not capitalism or proponents of capitalism, its the whinging sense of entitlement many seem to have summed up by these anti-capitalist idea's.

The capitalist system is largely meritocratic, people should stop blaming others for their problems and work to improve their own lot.

The Corinthian

Akrasia wrote: »

The fact that there are such low wages in these countries is because they have no welfare safety net and there is a huge surplus of labour.

That is actually a frightening ignorant oversimplification of what governs wage levels.

One of the flaws in Marxist economics was the idea that with increased competition, the capitalist would be forced to decrease wages so as to maximize profit. The reality is this actually didn't happen, largely because labour costs are actually far less elastic than Marx supposed.

If you have ever been to India, or South-east Asia or Africa, you'll quickly realize that while wages are low, so is the cost of living. I can grab lunch in Bangkok for one tenth the price I would pay in Dublin, so it is natural that the wage level will reflects this.

What does differ between the developed and developing Worlds is quality, and this is a far more complex issue than simply pointing the finger at at Capitalism, as it is related as much to political stability as well as cultural factors.

Additionally, bare in mind that many of these countries actually have socialist economies (in comparison to Ireland) - with your example, India, being a case in point, certainly up until the 1980's and still comparatively so.

The dynamics of the free market of labour produce misery and slavery, the only reason we have better standards of living here is because of the redistribution of wealth through social programs and taxation.

Another gross oversimplification. Redistribution of wealth alone does not make for a better standard of living. After all, the US rates highly in this regard, despite having limited redistribution of wealth, while the past communist economies of countries such as Romania and Albania, had incredibly low standards of living.

Another problem with the free market hypothesis is that it assumes perfect mobility of labour when the reality is very very different.

Actually it doesn't. You're citing a perfect market, which is a theoretical concept and that everyone knows does not exist.

One of the most important mechanism in a competitive free market is that supernormal profits cause others to enter the market, driving prices down until the inefficiencies are driven out of the market. This mechanism itself is the primary cause of the boom bust cycles in markets

Actually supernormal profits only occur in a non-competitive market. It is considered an inefficiency in free-market economics (outside of a small number of temporary specific cases, e.g. patents).

Its such an obvious feature of capitalism that it's quite amazing how 'libertarians' continie to place all of the blame for the market instability on the outside manipulator du jour.

What I find amusing is that just as you are suggesting that free-market economists will unerringly act as apologists for their system, you are unerringly doing the opposite and blaming it for everything.

There is good and bad in most economic systems. That's why they evolve and take from each other.

Akrasia

silverharp wrote: »

If looking at a point of view , I have to ask myself, where is the lie. On the assumption that you cant build a legitimate system on a fraud, theft or lies, does the weffare state stand up? I'd have to say it scores poorly. Like a ponzi scheme it benefits the early entrants who conribute little and reap the most benefits. It normally involves theft and lies via the process of inflation, anyone who lived on fixed income benefits through the inflation of the 70's could vouch for that. It creates a moral hazzard in that people are encouaged to make sub optimal decisions in their lives on the basis that they will be bailed out by the state.

Of course it could be improved, there are serious deficiencies in how the welfare system is operated, but you're only counting the costs of the scheme and ignoring the benefits.

The main benefits to everyone in society are that it cuts down on crime( there is still lifestyle crime, but the necessity to steal or engage in other illegal activities to put food on the table is reduced)
it provides a guaranteed income to people who are unable to work due to health reasons including people with long term disabilities who would not bebe covered by private insurance (otherwise they would be forced to beg or to rely on charities which may be intermittant or insufficient to meet their medical costs or living expenses)
It targets intergenerational disadvantage by providing educational opportunities to people from disadvantaged and (disfunctional) families. (which feeds into the reduction in crime over the long term)

On a grander scale it creates instability in the system in that it is normally a one way system that grows in good times but does not adjust down in bad times, thus it risks bringing down the state via debt defaults etc.
Show me a system where a gov cannot borrow and cannot raise taxes above x% of the GDP and I'll vote for it.

the real issue in that objection is inflation, and the boom bust cycles of market economics, welfare is never a driver of inflation (it usually trails inflation unless there is a political party trying to buy votes during an election)

Akrasia

Running Bing wrote: »

What exactly is the difference between a worker and a fat cat?

Well a fat cat is an obese feline, and a worker is someone/thing who creates wealth by his own labour and received a wage as payment.
A capitalist is someone who earns a profit from commanding the labour of others. (the capitalist might also be earning a wage independently of the profits he makes on the ownership of capital)

Ostrom

Akrasia wrote: »

A core principle underlying Marxist theory is that Capitalism is inherently unstable, and if left to its own devices, will ultimately collapse as workers revolt against the greed and exploitation of the capitalists.

Throughout the 20th century, there have been numerous instances where capitalist institutions collapsed through greed and corruption, and their collapse often presented a systemic threat to the entire economy in which they operated so much so that they necessitated bail outs from the public finances. (the wall street crash for one, Enron, the savings and loan scandal, the AIB bailout in Ireland, the current banking crisis, property bubbles and crashes in almost every economy in the world etc etc etc)

Marx anticipated that the collapse of capitalism would arise through workers revolution, but revolution doesn't seem to be required, merely a refusal (or inability) of the tax payers to indemnify the private capitalists against the risks that they take in the pursuit of their own wealth.

There are ultra capitalists out there who blame interference by the state for the failures of big business, but I would argue that if it wasn't for interference by the state in the first place, market capitalism would have collapsed by itself more than a hundred years ago.
The welfare state that libertarians are so opposed to is one giant insurance policy against worker revolt. Without minimum standards of living for workers in modern liberal democracies, it is inconceivable that there would have been such economic and political stability in the developed world in the latter half of the 20th century

As I have said on other threads, Marx offers the most sophisticated framework for examing pre-capitalist economic formations, feudal-capitalist and primitive communal-capitalist subsumption.

As an historical tool (to a point), it is excellent and insightful, as a framework for understanding future social change (including its various 20th century applications), it is useless.

I would limit 'credible' Marxist theory to understanding pre-nineteenth century pan-european transition - anything beyond this has been farcically abused

ionix5891

Akrasia wrote: »

The dynamics of the free market of labour produce misery and slavery,.

your missing the big white elephant in the room

OVER-population produces so much misery

mainly cause by lack of education and religions who think that having more people around is a great idea

better education and birth control (such as condoms being available to all) would eventually slow down the crazy population growth in this world

.

Akrasia

The Corinthian wrote: »

That is actually a frightening ignorant oversimplification of what governs wage levels.

One of the flaws in Marxist economics was the idea that with increased competition, the capitalist would be forced to decrease wages so as to maximize profit. The reality is this actually didn't happen, largely because labour costs are actually far less elastic than Marx supposed.

I wouldn't agree with that, I am far more worried about the competition within the labour market itself. Without a social welfare safety net if there are more workers than jobs, they will offer to work for lower wages themselves because it becomes a choice between working for a pittance, or starving to death.

If you have ever been to India, or South-east Asia or Africa, you'll quickly realize that while wages are low, so is the cost of living. I can grab lunch in Bangkok for one tenth the price I would pay in Dublin, so it is natural that the wage level will reflects this.

The prices are low by our standards, but they are still high enough that workers often have to work excessive hours 7 days a week just to survive (and to have any hope of saving for even the simplest 'luxuries' like an education for their children or a 50 cc motorcycle

Additionally, bare in mind that many of these countries actually have socialist economies (in comparison to Ireland) - with your example, India, being a case in point, certainly up until the 1980's and still comparatively so.

India had a socialist tradition, but this has been largely abandoned by successive right wing governments. In the sweatshops and factory farms, there is no socialism. Ireland is a relatively right wing country, but there is a welfare state that does not exist in the parts of the developing world where the worst forms of capitalism exist unfettered by 'manipulation by the state'

Another gross oversimplification. Redistribution of wealth alone does not make for a better standard of living. After all, the US rates highly in this regard, despite having limited redistribution of wealth, while the past communist economies of countries such as Romania and Albania, had incredibly low standards of living.

The lack of redustribution of wealth saw falling average wages in the U.S. The standard of living was only maintained by the debt bubble which we are seeing the consequences of today. (also, the 'land of opportunity' has a massive crime problem (despite having 2 million people incarcarated in jails) and millions of homeless people. There is gross inequality in the U.S. which is not reflected in those statistics.

Actually it doesn't. You're citing a perfect market, which is a theoretical concept and that everyone knows does not exist.

The model still applies. the dynamic of competition is that people are attracted to the wealth of a successful industry (like estate agents springing up everywhere in the last decade) until the market becomes over saturated and when it turns down, most of those new entrants will go out of business. Obviously the higher the supernormal profits, the more saturated the market becomes and the worse the consequences will be when the market crashes and overshoots on its way down.

What I find amusing is that just as you are suggesting that free-market economists will unerringly act as apologists for their system, you are unerringly doing the opposite and blaming it for everything.

Well, I am blaming capitalism for market failures, I don't see how that is so unreasonable (market failures, bubbles, and also failures in labour markets that result in poverty and de facto slavery)

Permabear

This post has been deleted.

Akrasia

ionix5891 wrote: »

your missing the big white elephant in the room

OVER-population produces so much misery
mainly cause by lack of education and religions who think that having more people around is a great idea

better education and birth control (such as condoms being available to all) would eventually slow down the crazy population growth in this world

.

Overpopulation is indeed a problem and I agree with you when you say education is the key to improving this, but overpopulation is the specific problem here, just like famines are rarely caused by a lack of food, unemployment and poverty are caused by failures in the distributioin mechanisms for wealth.

Productivity per person has increased massively in the last 50 years, but we all still work the same average hours per week (or close to it) and real incomes are relatively unchanged. So each worker is producing much more than before for not much extra money, where is all this extra wealth going? It is going towards higher profits for the capitalists.

Permabear

This post has been deleted.

turgon

Akrasia wrote: »

So each worker is producing much more than before for not much extra money, where is all this extra wealth going?

Ill hazard a guess - the 3 billion+ extra people born since the sixties.