Capitalism: Is it Working?

[Mister Agenda]

Whatever else it's faults, capitalism is good at driving economic growth, and economic growth is the only thing with a record of getting hundreds of millions of people out of poverty. 200 years ago, 90% of the world's population was in what would be considered extreme poverty today. 25 years ago it was about 45%. Today it is about 15%.

I'm all for mitigating downsides, but I'm not for slowing economic growth in undeveloped countries. When you're fixing a car, it pays to be careful with the engine.

[NoraBrimstone]

Whatever else it's faults, capitalism is good at driving economic growth, and economic growth is the only thing with a record of getting hundreds of millions of people out of poverty. 200 years ago, 90% of the world's population was in what would be considered extreme poverty today. 25 years ago it was about 45%. Today it is about 15%.

I'm all for mitigating downsides, but I'm not for slowing economic growth in undeveloped countries. When you're fixing a car, it pays to be careful with the engine.

If that was all down to capitalism, I'd be so surprised I might shit myself.

[Mister Agenda]

Whatever else it's faults, capitalism is good at driving economic growth, and economic growth is the only thing with a record of getting hundreds of millions of people out of poverty. 200 years ago, 90% of the world's population was in what would be considered extreme poverty today. 25 years ago it was about 45%. Today it is about 15%.

I'm all for mitigating downsides, but I'm not for slowing economic growth in undeveloped countries. When you're fixing a car, it pays to be careful with the engine.

If that was all down to capitalism, I'd be so surprised I might shit myself.

At it's essence, capitalism is investing privately controlled resources into providing goods and services more efficiently in order to benefit in the future. About 700 million Chinese and Indians have escaped extreme poverty in the last 25 years. I'm sure there were other factors, but investment in their productive capacity and markets for their goods and services is the primary source of their increased prosperity. Technological advances were very important as well, but investment in technological development with an eye to deriving a future profit from it is an important factor in that as well. I think the Chinese government has made the right call going to capitalism very gradually, avoiding the pitfalls of suddenly adopting 'The American System' that gave Russia so much trouble.

Southern and Eastern Asia are doing what developed countries have already done. Now some of the world's fastest growing economies are in sub saharan Africa. And it's about time.

[Sal]

As in the OP, it's the unpredictable term of capitalism that I'm most worried about - I agree that it's the most effective market approach as of date (barring Technocracy, but that's a personal opinion). However, I want the same level of responsibility that is seen in a regulated market and market analysis as well, so that we get a constrained market.

The most obvious example of this would be the issue of warning labels on products that would otherwise sell more without them. A purely free market would move towards a product without the warning labels, while a regulated market would demand warning labels as per an ethical decision.

[Minimalist]

I'd like to see where you got those figures from.

[little_monkey]

As in the OP, it's the unpredictable term of capitalism that I'm most worried about - I agree that it's the most effective market approach as of date (barring Technocracy, but that's a personal opinion). However, I want the same level of responsibility that is seen in a regulated market and market analysis as well, so that we get a constrained market.

The most obvious example of this would be the issue of warning labels on products that would otherwise sell more without them. A purely free market would move towards a product without the warning labels, while a regulated market would demand warning labels as per an ethical decision.

Unfettered free capitalism was tried in the 19th century, and it led to massive monopolies, which required the US government to step in and break those. There will always be a debate of how much regulation we need.

[Something completely different]

Whatever else it's faults, capitalism is good at driving economic growth, and economic growth is the only thing with a record of getting hundreds of millions of people out of poverty. 200 years ago, 90% of the world's population was in what would be considered extreme poverty today. 25 years ago it was about 45%. Today it is about 15%.

I'm all for mitigating downsides, but I'm not for slowing economic growth in undeveloped countries. When you're fixing a car, it pays to be careful with the engine.

You have a very narrow and wrong perception of history.

200 years ago, the industrial revolution was in it`s beginnings. Forcing hundreds of thousands (including children) to work under miserable working conditions in factories and mines, for 6 days a week, for low wages. Whilest their rights were literaly trampled uppon. Additionaly to that, in it`s early days, capitalism also helped such wonderfully humane things as slavery, to reach a level it had never been on before.

It was through the rise of the workers rights movements during the 1840s - 1880s that workers gained a chance to achieve the wealth and security which they were denied. These movements were the direct result of the then dominant culture of opression through miserable working conditions and minimal goverment intervention, and not the result of naiv ideas of creating a better society.

One can easily say that the 19th century with it`s complete ignorance towards the working classes and policies of minimal goverment intervention was a liberterians wet dream.

[Mister Agenda]

You have a very narrow and wrong perception of history.

Do tell.

200 years ago, the industrial revolution was in it`s beginnings.

That's not a coincidence.

Forcing hundreds of thousands (including children) to work under miserable working conditions in factories and mines, for 6 days a week, for low wages.

The 'force' was, though it was still a pittance, the pay was more than workers could get in agriculture. People didn't flock to factories because back on the farm was better. They weren't dragged from their homes and forced to toil in factories. They showed up looking for work. It's a shame that they couldn't do better, but the first step up from extreme poverty is still pretty damn impoverished and desperate.

Whilest their rights were literaly trampled uppon. Additionaly to that, in it`s early days, capitalism also helped such wonderfully humane things as slavery, to reach a level it had never been on before.

I agree, the process of capitalism increases efficiency whether your goals are benign, selfish, or evil. It's a system of economics, not a system of ethics. It is measured against other economic systems by how well it works. The ethics have to be supplied by the participants, just as in any other economic system.

It was through the rise of the workers rights movements during the 1840s - 1880s that workers gained a chance to achieve the wealth and security which they were denied.

And by that time, the wealth and security they wanted actually existed, thanks to decades of strong economic growth. The same movements in the infancy of the industrial revolution would have shut down the factories.

These movements were the direct result of the then dominant culture of opression through miserable working conditions and minimal goverment intervention, and not the result of naiv ideas of creating a better society.

If you think I am against workers movements, or for miserable working conditions, you are misunderstanding me. I'm merely being realistic. In an environment where extreme poverty is the norm, you can't magically skip the part of development where pay is low and conditions are poor. You CAN shorten that part with investment from already-developed countries and you CAN mitigate violation of rights with good laws, transparency and economic incentives. I'm not for sweat shops, but the way to get rid of them isn't to close them down and put their employees out of work. It's to make them obsolete as fast as possible, and that takes more effort than being picky about where you buy your t-shirts.

One can easily say that the 19th century with it`s complete ignorance towards the working classes and policies of minimal goverment intervention was a liberterians wet dream.

Given how the government then had its cheeks spread for the land barons, I would say it was a better example of soft fascism. The government in the 19th century apparently saw its role as giving away land and other special privileges to the companies headed by those most adept at bribery. Not so different from today. Libertarians tend not to be big fans of consumerism or corporatism or crony capitalism; all of which are detrimental to a free market. As long as politicians are in a position to grant corporations special favors, corporations will find a way to get away with influencing the tax code and having a hand in writing the regulations that govern them to the detriment of their less well-connected competitors.

[The Grand Nudger]

Unfettered free capitalism was tried in the 19th century, and it led to massive monopolies,

-and much, much more....good and bad, absolutely.

Agenda, while I agree with you in the broad strokes, this whole "crony capitalism/soft fascism" thing, to me, seems to be little more than trying to distances one's self from the weaknesses of a particular system. It's okay if capitalism leads to land barons - mine labor history etc..no tool is perfect. You clearly understand what went wrong and why we need to make sure that doesn't go wrong again. That doesn't mean that capitalism is -bad mmkay-.. just that it can be used for whatever purpose the operators ingenuity can devise. If you think that leveraging your capital to capture a government is anything -other- than one of the most powerful examples of free market capitalism (why isn't the government for sale..as a product..bud?)...then you're giving the free market a short shrift. That is one hell of a business transaction. To be completely honest, sometimes, when government is bought, it isn't so much that it -can be- bought that bothers me....as the bargain basement price it went for, you know?

Should we really be surprised when some otherwise successful system breaks down or grinds against itself when taken to extremes?

[little_monkey]

Unfettered free capitalism was tried in the 19th century, and it led to massive monopolies,

-and much, much more....good and bad, absolutely.

Agenda, while I agree with you in the broad strokes, this whole "crony capitalism/soft fascism" thing, to me, seems to be little more than trying to distances one's self from the weaknesses of a particular system. It's okay if capitalism leads to land barons - mine labor history etc..no tool is perfect. You clearly understand what went wrong and why we need to make sure that doesn't go wrong again. That doesn't mean that capitalism is -bad mmkay-.. just that it can be used for whatever purpose the operators ingenuity can devise. If you think that leveraging your capital to capture a government is anything -other- than one of the most powerful examples of free market capitalism (why isn't the government for sale..as a product..bud?)...then you're giving the free market a short shrift. That is one hell of a business transaction. To be completely honest, sometimes, when government is bought, it isn't so much that it -can be- bought that bothers me....as the bargain basement price it went for, you know?

Should we really be surprised when some otherwise successful system breaks down or grinds against itself when taken to extremes?

I did mention in an earlier post, "Capitalism works best for most sectors of the economy. But certain sectors, in particular infrastructure, education and health, need more active participation from the government , while the banking system needs tight government supervision/oversight. " <----- I like quoting myself,

I believe that a mixed economy serves better than an unfettered capitalism that we know from past experiences leads to excess. The problem in the US is with a party that has adopted as sacred manta that the government is too big, and tries in every which way to make it fail so they can be looked upon as the party who told you so. And so there isn't a healthy discussion on what is the right equilibium in regard to the government's role in the economy. Any role taken by the government, except with the military, is branded as a form of communism. They like to present the situation as either unfettered capitalism or communism, when in reality, there is a wide choice to make between those two extremes.