(December 5, 2017 at 8:28 am)Khemikal Wrote: there's no such thing as an invisible hand or a free market...so if that's what people take "some parts of capitalism work" to mean, then they're just flat out wrong.

I must admit that my knowledge of economics is rather primitive. I should probably read Wealth of Nations or some other works so that I am more prepared for discussions like this. What I was referring to in terms of self-correction was those graphs which showed supply/demand ratios (a foggy memory from economics 101). To me this demonstrates that capitalism assigns value to those things which consumers desire (like the "luxuries" I mentioned above) but only when those things are in short supply (ie more of those things need to be produced). Anyway, I don't want to belabor the point as I certainly agree that the supply/demand model is problematic.

(December 5, 2017 at 8:28 am)Khemikal Wrote: Here a favorite example of mine, it happens all over appalachia at present.

Yeah, this one hit close to home... literally. I live in Appalachia, and this very thing happened in my hometown. The county gov't attracted a number of corporations (Bausch and Lomb being the most notable) to set up factories in my hometown. Eventually, the public coffers were drained and the county could no longer afford to offer the incentives. The minute this happened, Bausch and Lomb and others packed up and left, flooding the area with unemployed workers. So I know first hand the perils of supply-side economics.

(December 5, 2017 at 9:26 am)vulcanlogician Wrote: I must admit that my knowledge of economics is rather primitive. I should probably read Wealth of Nations or some other works so that I am more prepared for discussions like this. What I was referring to in terms of self-correction was those graphs which showed supply/demand ratios (a foggy memory from economics 101). To me this demonstrates that capitalism assigns value to those things which consumers desire (like the "luxuries" I mentioned above) but only when those things are in short supply (ie more of those things need to be produced). Anyway, I don't want to belabor the point as I certainly agree that the supply/demand model is problematic.

Now that I know you live in redneckistan (like me) I've got some good ones for you.  Consider The Dollar General, and agricultural subsidies. 

We'll start with the latter.  If economics 101 examples in a vacuum worked in practice, it would be hard to understand the history of subsidy.  If there is ever a consuming demand for -any- product..it would be food.  This is a demand driven by absolute necessity.  People never decide that they just don't want food, they can't.  So that eliminates a variable, getting us closer to the vacuum.  So let's imagine a small town of 100 people, back in the day.  100 people need alot of corn.  The "invisible hand", recognizing this, sets a high value for a product in demand.  This leads to many producers competing.  Inherent overproduction.  The value drops.  The next year, the farmers who got hosed don't plant as much corn, or no corn at all.  The value goes up because there isn't enough to go around.  Now, we may see this as some sort of eventual levling out, and better producers or marketers winning out over poor ones...bu that's -not- how it actually played out.  One seasons winners were the next seasons losers, and the product was over or under-produced chronically.  When it was overproduced, this led to poverty, when it was underproduced, malnourishment and starvation.  Some people got out of the market entirely in favor of higher value crops...the cycle repeated itself there.  The constant see-saw led to the planned destruction of crops, and payments meant to induce producers to limit their production.

The invisible hand failed, and in a breathtaking show of just how much we -don't- believe in it and how ineffective it really is even as a concept...we created permanent agricultural subsidies.

Quote:Yeah, this one hit close to home... literally. I live in Appalachia, and this very thing happened in my hometown. The county gov't attracted a number of corporations (Bausch and Lomb being the most notable) to set up factories in my hometown. Eventually, the public coffers were drained and the county could no longer afford to offer the incentives. The minute this happened, Bausch and Lomb and others packed up and left, flooding the area with unemployed workers. So I know first hand the perils of supply-side economics.

...and now the Dollar General. Hehehe.  The dollar general is beating out walmart in rural areas.  Their business model famously relies on the permanent creation of an impoverished american underclass.  Any place a dollar general goes up..the owners are expecting the residents to stay poor for the forseable future.  If they don't, they'll get crushed by walmart....which, I have to say is an incredibly sobering realization.   Walmart occupies a socioeconomic niche slightly above the bottom.  Walmart......

Now, the way a dollar store gets its shit (if you never worked for one) is buying bulk containers sight unseen....and then distributing whatever goods they happen to contain.  Some also offer targeted purchases...the bulk containers are what we would call loss leaders in any other model - get's people in the door-...except nobody loses a single red cent on any product sold at a dollar store.  The helves are stocked with bric a brac.  None of it necessarily valuable to the customer, but all of it available.  If we wanted to explain dollar stores, in the general sense ( ) the product they are selling is not the product on the shelves...but the experience of a purchase made available to people who could not afford to avail themselves of the same....at a walmart.  While the model keeps unsold product to a minimum..there -is- unsold product..and it get's shipped and ferried around to other stores (sometimes being marked down but just as often getting marked up or combined into value added products).  All of this inefficiency, from the production of metric tons of useless plastic bric a brac, to the movement of the same to and from each location serves the ends of the movement of capital.....but I don;t think that anyone is really ready to assert that the shoppers are getting good deals on products that they value (or even..that -are- legitimately valuable).  The old model, though..was incomplete, and it wasn't until they started offering overpriced food -that qualified for ebt- that dollar stores began to gain against walmart..who'd went the route of welfare queen beforehand proving the model.  

Yet again, no one believes that the production or value of dollar store bric a brac is related to dollar store bric a brac being in short supply or valuable in a non-trivial sense, nor is the model predicate on supply and demand...but upon exploiting reliable sources of income in the form of welfare services (and, like walmart, dollar stores rely on welfare programs to cover the col of their employees and hope that the employee also shop there with their ebt, lol).

I know this was all alot, but it was an explanation of an opinion of mine that..while we fellate the idea of free markets and supply and demand in class....we turn around and do the exact opposite in practice, in business. It's almost as if the vacuum 101 examples are entirely divorced from reality. Elaborate mythmaking. So elaborate and so entrenched that had I ot given those examples the opinion would likely be rejected on principle..and that even though I have given those examples someone is going to find some way to reinterpret the history of subsidy and the present reality of low end retail. It's just so damned bleak, that cant be s and d or free markets or capitalism working as intended...right?

If you look at economical entities in terms of evolution, then I think things look more clear. If the system doesn't allow for natural selection, then eventually you'll end up with the equivalent of in-breeding: companies which are grossly maladapted to the environment, and which can only be kept alive so long as others will keep pumping resources into the system.

In the short run, antibiotics and expensive treatments save lives-- kids' lives, especially, and it is impossible for us to say no to that. However, I'm pretty sure that the overall quality of the human gene pool is currently dropping. Eventually, there will be a bursting of that bubble: the environment will introduce a pressure so strong that all the good intentions in the world won't allow the weak to survive, and the species will go through a very painful period of correction.

All of that, just take out "kids" and put in "companies," and I think that's a pretty straight view of how we should view capitalism.

Too bad i don't view economics by evolution . And believe it's ruthless and inhumane to do so .

(December 5, 2017 at 8:38 pm)Tizheruk Wrote: Too bad i don't view economics by evolution . And believe it's ruthless and inhumane to do so .

The comment I just made covers that: reality is ruthless, but we cannot stand to be.  Therefore we do things which weaken us collectively.  For example, in terms of genetic fitness of the species, vaccines are definitely a downer; but in terms of keeping individuals alive and well, they are a big plus.

That being said, more and more resources go into supporting institutions which cannot stand on their own.  At some point, the inefficiency is so great that the system will have a catastrophic failure.  Then you don't have a choice whether or not to be humane. Winter is coming.

(December 5, 2017 at 10:58 pm)bennyboy Wrote:

(December 5, 2017 at 8:38 pm)Tizheruk Wrote: Too bad i don't view economics by evolution . And believe it's ruthless and inhumane to do so .

The comment I just made covers that: reality is ruthless, but we cannot stand to be.  Therefore we do things which weaken us collectively.  For example, in terms of genetic fitness of the species, vaccines are definitely a downer; but in terms of keeping individuals alive and well, they are a big plus.

That being said, more and more resources go into supporting institutions which cannot stand on their own.  At some point, the inefficiency is so great that the system will have a catastrophic failure.  Then you don't have a choice whether or not to be humane.  Winter is coming.

Just because elements of reality can be ruthless does not mean humanity need be . And again i don't view civilization in competitive terms civilization should not be a reflection of nature . As for defects in a system . That simply means the system needs to be healed or repaired not whole sale slaughtered .

This isn't my best subject but two things are obvious to me:

Pure capitalism is very cold, heartless and amoral - but very efficient.

Collectivism (or communism, socialism - whatever we want to call it) is well-intentioned, empathetic - and proven to be utterly ineffective. Instead of us all being equally rich, it results in us all being equally poor.

So, like everything else in life, we must endeavor to select the best trade-off.

That's the way it is with engineering (which is my strong suit). You ALWAYS come up against trade-offs. How do you build the best car? You don't. There is no such thing. You can build the most economical car (it will totally suck by any measure other than economy) or the most practical car (it will be totally boring and help you maintain your virginity) or the most luxurious car (it will be quite impractical, expensive, uneconomical and help you maintain your virginity) or the fastest car (which will be almost uninsurable, uneconomical, uncomfortable and most likely to land you with an STD virus).

You have to find the best balance between the positives and the negatives. It's a bitch because not everyone will agree on what that best balance is.

That's the way it is with economic systems - but even worse. There is no ideal or best system but unlike where we have a choice to purchase a particular type of car, we have little practical choice of what economical system we live under. There isn't even a best set of compromises because good luck getting everyone to agree on what that best middle ground is. It's a never-ending battle and it's probably always going to be a never-ending battle until we live under a totally different paradigm where such things are irrelevant. That isn't something any of us are at all likely to see.

Capitalism doesn't have to be cold, heartless, or amoral..and there's nothing inherently efficient about it.  Communism doesn't have to be well intentioned or empathetic, nor does it have to be ineffective..nor does it make everyone "equally poor" - though a person or a people who have historically been over-represented in wealth or ownership will likely feel as though this were the case.  

If all the wealth in the world were equitably distributed between individuals, it would amount to a value of roughly 30k for each person...more than half of americans earn a year...and we're the 1%................food for thought.

There is nothing about either economic system that is inherent -to- that system other than the self stated limits of the ideology.  Capitalism is the private ownership of the means, communism is the public ownership of the means.  That is the only inherent and necessary difference between the two. Capitalism -could- be arranged to yield the putative benefits of communism, and vv. We make these tools, these markets, these systems. We decide how they are expressed in practice. All that is inherently different between the two, and all that we decide when we make a decision between the two (which needn't be made...in point of fact, as you noticed) is who owns the means. The respective weakness of each system is more accurately expressed as a weakness in central planning in the case of communism, and a weakness in the disparity between capital efficiency and meaningful efficiency - in capitalism.

People sometimes forget that there is a long list of capitalist states that are relative failures to their communist counterparts. This isn't exactly groundbreaking, in that a well planned communist state and a well regulated capitalist state are likely to succeed or fail on similar grounds, betraying the notion that the systems -themselves- are accurate predictors. You'll find that a "pure" example of either system is thin as hell on the ground, and I'd chalk that up to ideological commitments being less than effective as expressions of practical systems.

IMO, the necessities of life should be produced /w a communist model. Many of them already are, in one form or another - even in capitalist states. The rest can go to a capitalist model. Not only would this address the most glaring problems between each system as we've noticed them in practice...it would promote greater productivity and innovation. If people didn't have to work to eat, that would free up alot of productive time and alot of intellectual capital. The cost of feeding..and even housing the populace of the united states - at a minimum level at least...is more than covered in taxes on consumer goods and services (and to some extent already is). We have hungry and homeless because we choose to..not because they choose to be so. I think w could employ a communist model in other areas as well, not instead of a capitalist model but in tandem.... but I'd settle for the basics, lol. Handl;e that, and see what the situation looks like then. It;s difficult to argue that it would not be a qualitative improvement.