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Originally Posted by rong
Denying capitalism has paved the way for huge benefits to society isn't really what the argument is about. I think it's feasible that capitalism is an essential part of human progress. But I think it's also feasible that we reach a point where capitalism is no longer optimal for the population as a whole.
Wuf, you refer to all criticisms of capitalism stemming from a growing population and a need for resources. That's kinds true. But it doesn't change the fact that at this current point in time resources could be allocated in a different way that would have huge benefits for society over all. Right now the wealth inequality has some people so wealthy they are spending millions to cater for every whim whilst others are starving and dying. Capitalism may well find a way of reducing the numbers of people in extreme poverty and the severity of that poverty for a large number of them, in time. But that doesn't mean it's the best way. Some would say that the mere fact we could improve that many lives so easily and don't, and specifically won't under capitalism, is a major criticism of that system all by itself.
I mean this sums up one of the problems with capitalism quite well. With a huge and growing population and dwindling resources we must sooner or later reach a point where allowing technological advancement, which is needed to solve the problem of population growth and dwindling resources, to be at the whim of the extremely wealthy, no longer adequately addresses the needs of the population which they are so far removed from. It takes someone, some group, government etc to say lets think about the problems of the majority and focus resources on solving those rather than focus on the problems of the minority (the wealthy wanting more) and hoping that we solve the problems of the masses as a byproduct.
Wealth inequality doesn't tell us much, because it's a symptom of poorly understood dynamics (not all of which are problems). Regardless, we need hierarchies and inequality. Population size and tech levels make it so. As to how much, nobody knows.
I don't really disagree with the problems you state, except I don't think they're of capitalism. Even though I think that over the long run, capitalism can account for all these issues, I still think it works far better with the welfarism adjunct. Whenever I talk about an optimized society with capitalism, it assumes welfarism. The problems non-wealthy people have can be fully addressed by the team of capitalism-welfarism.
Thinking about capitalism more, you could argue that what it actually does is allow those with vast wealth to do the bare minimum. The absolute minimum required to enhance their own fortune. This includes technological progress. They will invest the minimum required to improve technology for themselves.
The wealthy probably do more under capitalism than any other previous system. Aristocrats still did stuff, but they were more along the lines of personal and political things. Today's wealthy elite are pretty much all businesspeople, many with great educations and very high levels of responsibility
A response to this is that they can afford those things as well as afford to fail at those things. Which I completely agree with. Some institutions or laws, regardless of who gives them, should provide access to social mobility and a safety net to everybody. An example is how not having universal healthcare coverage has stopped a lot of people from starting their own companies, moving to knew jobs, or taking jobs they enjoy more. The wealthy have the luxury of not having to make decisions based on healthcare, and the working class should as well
Rich dude owns factory. He pays the minimum wage (minimum required to get adequate workers, not legal minimum) to his workers and does not offer a profit share. He may invest in research and development to improve efficiency and this has the benefit to society of improving the overall level of technological advancement. If he improves efficiency he can make more profit which is his motivation to do so. He will employ researchers and developers as he deems appropriate. This is capitalism.
Another option. Rather than paying the minimum he pays that figure plus a considerable profit share. If profit increases then everybody benefits. In this instance we have an entire workforce with an incentive to increase efficiency and consider ways of developing technological advancement. Now the factory owner could still hire an r&d team. If he did we would see at least the same level of technological advancement and possibly more as many more minds are focused on improving efficiency. Efficiency as a whole would probably be greater in this example, however profit to the factory owner would not.
These are both capitalism. There's nothing stopping business owners from distributing profits to workers in like manner. In fact, many do. Renton's points on this about how if it really was better, the system would work that way, has a lot of truth to it. That's what dynamism is all about
My addition is to not underestimate the amount of money it takes to invest. Some investments don't take much, but some take astronomical sums. Check out what Google's doing: Fiber, Glass, Cars, tons of others shit. What would they be doing if they had double the amount of investment capital? Triple? I think they'd be investing it all into these and some even more extravagant ideas. A lot of the great companies we hear about use their money for good. I think a lot of the ones who use their money for bad are gradually getting squeezed out. Again, it's about dynamism. It's the marketplace
My point with this is just because we see certain amounts of money needed for certain amounts of investments, doesn't mean that's how it always is. IIRC, Elon Musk and his partner dropped like 60MM of their own (parents') money on Paypal. That huge amount of capital was necessary to turn a start up into a sustainable niche, and it grew from there. But what if an opportunity came along that required 500MM to build and Musk didn't have it? What if he didn't have it because of all the taxes or profit distributions he paid earlier? Well, maybe somebody else would come in and do it. Unlikely that that is, it could happen. So let's say Musk went to Bill Gates and Gates loved the idea, so problem solved, right? What about that opportunity that costs 100B that nobody knows about? As you can see, we don't know what the upper limit is, and it's possible it doesn't exist. What this line of inquiry shows is that both hubs of wealth and private interests in control of those hubs are necessary for some business and tech innovations. The government isn't a solution to the Paypal problem. No matter how much money it has, the government doesn't do start ups. Innovation in the government does exist, but it's a weird kind and very limited.
Investments pay dividends to the future society as a whole. Stinking stupid filthy rich people with the capital to throw around optimize this scenario, and over the long term, it makes a better world than one without those investment hubs. As he's always my favorite example, Elon Musk has said he's willing to lose half his fortune from the Paypal sale on SpaceX. I don't know how much that is, maybe 200MM. If his SpaceX goals succeed, Musk will be responsible for trillions upon trillions upon trillions of added value to the world economy over the long run. Compare this potentiality in a scenario where Musk only has 20MM to work with versus 20B. If the former, he would likely not even take up the project in the first place, but if the latter, he would probably never go broke on it and could pursue the dream for a lifetime
I think the frustration with capitalism is that many who argue for it argue for a truer form of it and that it is the optimal system and even more so in a pure form. People look around at wealth inequality and think surely we could do something about this in a way that the current system is not. I think unfettered capitalism leaves lots of people behind and that a tweaked version has the potential to benefit a greater number at a quicker rate.
Yeah that's my answer too. Capitalism-welfarism. Let's get things like this going http://www.morganwarstler.com/post/4...e-market-based
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