Capitalism: Is it Working?

[Mister Agenda]

And in my opinion I see myself proven in my claim that democracy causes wealth when looking at the recent emerging economies in South American and Africa. In contrast to which India, which has been a democracy for 60 years and olny recently opened it`s markets has hardly created widespread wealth but simply a small middle class.

Sorry to snip so much, but I just didn't disagree much with what you're saying, so I skipped to what I found more contraversial. I appreciate your courtesy, by the way.

I would think India would be an example of a democracy that didn't lead to wealth at first because so many Indians opposed open markets. Many African countries had similar resistance due to a similar experience with colonialism. It's understandable, but was one factor in holding them back. I'm glad the wind has shifted in that regard.

What has that got to do with your theory that the first workers rights movements would have destroyed their countries economies?

I said 'shut down the factories'. Their economies would merely have gone on as before, just like in other countries that didn't industrialize. The availability of cheap labor combined with new technology and enough wealth to invest to implement it is what made building those factories so attractive in the first place, investment happens when the gain is perceived to be greater than the risk. Once factories in an agrarian economy are established and become the norm, the perceived risk of investing in something so new goes down, which means the gains can be lower and still attract investment. Of course today, most of the technological development has already occurred and it's easy for investors in more developed countries to invest in projects in less developed countries; so if we're smart, getting someone from subsistence farmer to fairly compensated employee could be much less traumatic than it was for us.

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The only example in history I am aware of in which the powerfull decided to give political power to the public was the South Korean dictatorship which disolved that way voluntarily in 1989.

Other than that, it almoust happened everywhere through uprisings and with blood being spilled.

Perhaps you're misunderstanding me. That the powerful won't give away power unless they feel they have to was my point. Although I suppose military takeovers of Turkey are also an exception; they have always returned the country to civilian rule once they were satisfied it was abiding by the country's constitutional provisions again.

I regulary read articles on African economics - and most economists from which I read articles agree on one point: Africa will not be a base for sweatshops. Africa is going into a completly different direction by not simply producing the products designed and developed in the West. It is creating it`s own stuff.

Nothing would please me more than Africa being able to avoid the 'cheap labor step'. Its people have certainly paid their dues in other ways.

Anyway, what has that to do with my argument that the free market did not create democracy as predicted in the 80s by conservatives?

Nothing, but in my defense, I'm not sure why I'm supposed to argue with that point. The only type of government necessary for capitalism is one in which people are allowed to own businesses and conduct commerce, so a certain degree of economic freedom is vital; but that doesn't necessarily translate into civil rights.

Africa actualy proves my point that it is democracies which create free markets and not the other way arround.

When they get around to deciding they want them. It isn't automatic. African democracies resisted global trade for many decades, fearful for their autonomy. 'Free' is always relative when it comes to markets, but clearly countries that aren't truly democracies (although they usually have 'democratic' in the full name of the country) have also effectively implemented (or maybe more accurately, 'allowed') market economies.

It wasnt Pinochet`s market reforms that ended his dictatorship - it was he himslef, who through his horrific brutality made him more and more unbareable for his people and became a very bad smalling stain on the list of allies to the west. It is a bit cynical to believe that market reforms ended Pinochets reign. The main reason for it`s end was the collapse of the soviet union which made it obsolete as a western ally. Also, the catholic church finaly started being critical about the South American regimes in the late 1980s and that church still has alot of power there.
The free market didnt add anything significant to the collapse of the regime - Chile was simply a great place to produce cheap stuff in factories because people who protested conditions would disapear with a bullet in the head in some jungle.

Good points. Perhaps it was a coincidence that the end of his regime came after he instituted significant market reforms. 'After' doesn't mean 'because' and all that.

I mentioned above - I forgot about the US - which can be definatly seen as a society in which the free market created wealth and democratic liberties - especialy under Jefferson and Jackson. But the free market did not create the democracy itself.

I think The Enlightenment deserves most of the credit.

As far as I know the railroads were built mainly by chinese imported labor which could be more easily exploited since they were considered to be an "infirior race"

Yes, on land provided by the government, on the backs of extremely poor immigrants. I think it's a sign of the brutality of the exploitation of and hatred toward Chinese that despite millions of them immigrating in the 1800s; they make up a small fraction of our population in comparison to the descendants of people that were literally bought and traded as slaves. Without researching it, my guess is that a major factor was that Chinese men were so disproportionately represented that they couldn't grow their population significantly.

Actualy in the first years of the famine, the English goverment did help by making inferstructure investments like the building of roads. Dont forget that the famine didnt just hit Ireland but all of Europe - and these actions were undertaken in all of Europe - yet in the UK they were stopped because they were considered to be too much intervention by goverment in the free market. The same was not only done in Ireland but in all of the UK - including Scotland were there were also people starving to death.

As I said, I think government intervention in mitigating emergencies is a good thing. I also think if 80% of the Irish population (the Catholics) hadn't been disenfranchised from owning land or having a vote, Ireland would not have become so dependent on potatoes in the first place.

The Indian famine of 1876 was caused through a drought and the implementation of plantations which werent capable of creating enought food but a bigger profit for the companies which ran them. When the famine kicked in the governor of Bengal had to stop importing aid from Burma since it was considered to be a too high expence for the goverment.
The Indian Vice Royal of that time actualy believed that this was a natural process in which through implementing these new more profitable plantations the starving of millions would create a better base for a more profitable and wealthier society - even the most conservative estemates are that 50 million people died as a result.

They were pretty non-interventionist when it came to spending money on keeping poor people they subjugated alive, but very interventionist in imposing the systems they preferred on them.

Of course communism caused the probably worst famines of the 20th century in the Ukrain and communist China, which also proves their incompetence for providing security.

They had the same root: A ruling class dictating how millions of people without true representation should live. Perhaps the supreme virtue of democracy, given how little other rights matter when you're starving, is that suffering people can make their rulers pay without a bloody revolution. That we routinely change our leadership without bloodshed is something feudal societies could scarce believe.

But to get back to the point, the common policies during the 19th century concerning economics in Europe was one of non goverment intervention and it often resulted in disaster - especialy in a society in which the wealthy have absolutly no boundries set to their actions.

Which is why the central theme of societal evolution is arguably method of governance rather than economic system.

A democracie needs interest groups - without interest groups it wouldnt even survive - the very thing that defines democracy is that the people are represented, and without interest groups representing their concerns a goverment would simply be out of touch with reality.

It doesn't need interest groups to have power out of proportion to the interests they serve. A corporation with good lobbyists can cripple a less-connected competitor with discriminatory regulation. A lobby like the NRA can control debate on its single issue. Lobbies owning senators is not a virtue of democracy, it is a disease afflicting it.

We may debate the way in which those concerns are brought forward ( I am also not a big friend of powerfull buisness lobbys and unions) but I do not see a democracy working in touch with reality without interestgroups.

I'm not against interest groups. I'm against them having improper influence, which a system in which election campaigns cost millions of dollars and are financed with donations is prone to.

But it can exist without democracy. and to be fair - so can every single political ideology or social and economic system. I simply wanted to mention that because you left oppressive regimes out of that list which had opened to the free market.

That was an oversight, not a claim that oppressive regimes and capitalism cannot coexist.

Anyway, my previous point was that believing in a magic capitalism which will solve each problem is just like believing in a magic marxism which will solve all problems.

You are correct about that. Capitalism on its own can only solve problems of inefficient resource allocation.

Snip

I simply wanted to point out that it is a phrase often used by liberterians who cannot argue their way out of a bad situation caused through the policies implemented by them.

Fair enough, and although I'm more of a 'pragmatic liberaltarian' than an ideologically pure Libertarian, I'm close enough to understand why you might think I follow the usual dogmas.

Incentive doesnt nececerely bring wealth or democracy. In the Germany of the 1930s it produced tanks.

I don't think it does either. All incentive produces is effort toward a particular goal. That's a valuable thing to know how to harness, whether you're a hero or a villain.

Incentive through capitalism will only bring more wealth when it applied in a country which already is a democracy, if not - it will be abused.

It will be abused, just like any other tool. But China is still getting wealthier.