The greatest enemy of capitalism

Seen something interesting in the news or on the intertubes? Discuss it here.

Moderators: Zamfir, Hawknc, Moderators General, Prelates

User avatar
Gunfingers
Posts: 2401
Joined: Wed May 30, 2007 7:15 pm UTC

The greatest enemy of capitalism

Postby Gunfingers » Wed Jan 07, 2009 2:03 pm UTC

...was, it turns out, its creator, Alexander Hamilton.

If you don't feel like reading the whole article (it is kind of long) the gist is that a truly free market has never existed in the US. The article blames this on Hamilton who, as Treasury Secretary, interpreted the "general welfare" clause to mean anything "in the public good", contrasting TJ's belief that it meant only the things enumerated in the constitution.

The article raises some interesting ideas. Is anyone here a historian in American Economics? How accurate is this?

User avatar
Darkscull
Posts: 798
Joined: Wed Jan 23, 2008 10:46 am UTC
Location: Now where I want to be

Re: The greatest enemy of capitalism

Postby Darkscull » Wed Jan 07, 2009 2:22 pm UTC

Huh, I always thought it was logic, reason and human kindness :razz:

Seriously though, I don't really find it surprising when this sort of thing turns up, not sure why.

I tried to read the article, but stopped during the second paragraph or so because it sounds pretty much exactly like a crackpot.
Physicists do it in an excited state.
m/bi/UK/Ⓐ/chaotic good
b. 1988 d. 20xx

Game_boy
Posts: 1314
Joined: Tue Mar 04, 2008 7:33 pm UTC

Re: The greatest enemy of capitalism

Postby Game_boy » Wed Jan 07, 2009 6:40 pm UTC

If we ignore the specific views of that guy (because they aren't well reasoned), I would say that no country in the world is a good example of free market economics: even in the US there exists corporate welfare, trade tariffs, entrenched near-monopolies in many industries, government outsourcing that distorts the market (defence industry is a good example) and so on.

I contend that "real" capitalism has never been tried well enough to see if it works. For example, the current recession has led many commentators to condemn laissez-faire economics; looking deeper, it was many of the past government interventions that caused the problem (Fannie Mae/Freddie Mac, Homeowners Act, SEC legitimising credit rating agencies) and thet the way to solve the problem would be a more, not less, free market.
The Reaper wrote:Evolution is a really really really long run-on sentence.

Rysto
Posts: 1460
Joined: Wed Mar 21, 2007 4:07 am UTC

Re: The greatest enemy of capitalism

Postby Rysto » Wed Jan 07, 2009 11:02 pm UTC

Absolute free market capitalism hasn't been tried because everyone other than the most deluded libertarians understand that it's lunacy. A completely free market is only efficient under a very specific set of condition which generally aren't satisfied in the real world.

User avatar
d33p
Happy Fun Ball
Posts: 1714
Joined: Thu Oct 04, 2007 3:06 am UTC
Location: La Maison de la Liberté

Re: The greatest enemy of capitalism

Postby d33p » Wed Jan 07, 2009 11:19 pm UTC

Rysto wrote:Absolute free market capitalism hasn't been tried because everyone other than the most deluded libertarians understand that it's lunacy. A completely free market is only efficient under a very specific set of condition which generally aren't satisfied in the real world.


You know, I've heard this argument before and never quite understood it. At the risk of sounding like a "deluded libertarian", it seems to me that reality often usurps ideological extremes, making any pure experiment (whether social, economic, or otherwise) downright difficult if not impossible. I think a fairly good example is how communism and free trade co-mingle in Israeli kibbutzes; if memory serves, that's how they generally work, but I'm open to correction on this point.

I'd be interested to hear what "specific set of condition [sic]" could exist in which pure capitalism might work. Smaller social/cultural subgroups, a la Galt's Gulch? City/states? Could it be that the reason capitalism hasn't been tried en masse is because governments trend towards large, centralised structures rather than loosely affiliated automonous regions? (Obviously macro- vs. micro-...)

Also, for the record, I'd like to point out that "everyone" doesn't understand free market capitalism as lunacy, because not everyone has a background in economics or has researched the various schools of thought. I'd venture that as a whole, most folks simply want the ability to keep and use what they produce without undue interference.
Parka wrote:I assume this is yours. I don't know anyone else who would put "kill a bear" on a list.

Rysto
Posts: 1460
Joined: Wed Mar 21, 2007 4:07 am UTC

Re: The greatest enemy of capitalism

Postby Rysto » Wed Jan 07, 2009 11:40 pm UTC

d33p wrote:I'd be interested to hear what "specific set of condition [sic]" could exist in which pure capitalism might work.

Excuse me. I didn't mean to imply that those conditions could possibly created in reality, only that there is a set of theoretical conditions under which the free market is efficient(many of these conditions have the word "perfect" in their name, which tells you something about whether they can ever be achieved).

User avatar
d33p
Happy Fun Ball
Posts: 1714
Joined: Thu Oct 04, 2007 3:06 am UTC
Location: La Maison de la Liberté

Re: The greatest enemy of capitalism

Postby d33p » Wed Jan 07, 2009 11:51 pm UTC

While I understand your reply, it seems like a bit of a cop-out to me. I'm sure you'd agree that a theoretical set of conditions could be imagined to make ANY economic theory act efficiently. Imagination is limitless. Reality is not.

Some would see the obviously disparate gaps in overall wealth that stems from free-market capitalism as a bad thing. Some (myself included) consider it the nature of the beast, and in fact, the nature of nature. But I think that if one accepts the axiom that the entire purpose of a large-scale economy is to facilitate the highest possible standard of living for its participants, than it's fairly obvious that, on average, those societies adopting the highest majority percentage of laissez-faire ideals have done quite well for themselves.

Perhaps I'm OT here, since the OP was originally about Hamilton's views... so if I've hijacked this conversation, please let me know.
Parka wrote:I assume this is yours. I don't know anyone else who would put "kill a bear" on a list.

Rysto
Posts: 1460
Joined: Wed Mar 21, 2007 4:07 am UTC

Re: The greatest enemy of capitalism

Postby Rysto » Thu Jan 08, 2009 1:22 am UTC

d33p wrote:those societies adopting the highest majority percentage of laissez-faire ideals have done quite well for themselves.

Well, the interesting thing about the set of preconditions for free market efficiency is that they are a lot closer to reality then the preconditions for efficiency for other systems. For example, one precondition for free market efficiency is "people will act in a manner that benefits themselves the most. This has a nice side effect that greedy people can actually improve the efficiency of the system, which I really believe is a big reason behind why capitalism has been so successful.

However, there are certainly a lot of preconditions that aren't fulfilled in the real world, and that's where the government comes in. A big one is the condition that all goods be private and excludable. Now, those are fairly technical terms and I don't want to get into the precise definitions, but one great example of a good* that doesn't meet those conditions is pollution. This is why the pollution is a big problem in free market capitalism, and why government regulation is necessary to deal with pollution. Now, that's not to say that there can't be market-based solutions to pollution, but any market-based solution will require the intervention of the government to change the incentives people face to discourage them from producing pollution.

* Economists often call it a "bad", in that it's the exact opposite of a "good". A good is something that makes you better off the more you have of it. A bad is something that makes you worse off the more you have of it.

User avatar
fjafjan
THE fjafjan
Posts: 4766
Joined: Fri Oct 06, 2006 12:22 pm UTC
Location: Down south up north in the west of eastern west.
Contact:

Re: The greatest enemy of capitalism

Postby fjafjan » Thu Jan 08, 2009 1:43 am UTC

Well one condition would need to be no externalities, which are not at all accounted for in austrian economics. They just assume if you get some incredibly poor people that won't affect crime rate etc, or that if you dump shit in a river that won't lead to increased healthcare costs in the region etc etc. It assumes if everyone looks incredibly narrowly at their own profit, right now, it will all be maximized for everyone. (or rather, overall maximized). This has been repeatedly proven false, and making markets freer etc

So essentially what Rysto is saying above is more or less that. There are other problems aswell(for example, compare countries who have implemented these more laissez fair solutions, like most African Countries (forced to do this in exchange for loans etc), with countries that have implemented more controlled economics, in like with Keynsian theories, such as China), but that should suffice.
//Yepp, THE fjafjan (who's THE fjafjan?)
Liza wrote:Fjafjan, your hair is so lovely that I want to go to Sweden, collect the bit you cut off in your latest haircut and keep it in my room, and smell it. And eventually use it to complete my shrine dedicated to you.

User avatar
Jjarro
Posts: 204
Joined: Wed Sep 20, 2006 12:29 am UTC
Location: Arvada Colorado, U.S.A.
Contact:

Re: The greatest enemy of capitalism

Postby Jjarro » Thu Jan 08, 2009 4:45 am UTC

Please, never suggest that Alexander Hamilton was the creator of capitalism. I would, however, agree that he did more than any other man in history to stack the deck in the United States system in favor of regulation and central control.

User avatar
debuggingRL
Posts: 18
Joined: Wed May 16, 2007 1:12 am UTC

Re: The greatest enemy of capitalism

Postby debuggingRL » Thu Jan 08, 2009 4:35 pm UTC

Rysto wrote:However, there are certainly a lot of preconditions that aren't fulfilled in the real world, and that's where the government comes in. A big one is the condition that all goods be private and excludable. Now, those are fairly technical terms and I don't want to get into the precise definitions, but one great example of a good* that doesn't meet those conditions is pollution. This is why the pollution is a big problem in free market capitalism, and why government regulation is necessary to deal with pollution. Now, that's not to say that there can't be market-based solutions to pollution, but any market-based solution will require the intervention of the government to change the incentives people face to discourage them from producing pollution.


Polluting of other people's property that causes harm can be treated as tresspassing. I don't think the government needs to regulate anything. I've heard that the military is the biggest polluter in the (country?) so it doesn't seem to be working so far. If government regulates any part of the market, the people with the most influence - those with the most money - will regulate it so it benefits them. I don't know if free market capitalism is perfect, but I think its better than government regulated capitalism or a mixed system.
Today a man on acid realized that all matter is energy condensed into a slow vibration,that we are all one consciousness,experiencing itself subjectively,theres no such thing as death,life is only a dream,in which is an imagination of ourselves.

Rysto
Posts: 1460
Joined: Wed Mar 21, 2007 4:07 am UTC

Re: The greatest enemy of capitalism

Postby Rysto » Thu Jan 08, 2009 8:58 pm UTC

debuggingRL wrote:Polluting of other people's property that causes harm can be treated as tresspassing.

What about air pollution? Who owns the air? Nobody, and that's at the root of the problem.

User avatar
Ixtellor
There are like 4 posters on XKCD that no more about ...
Posts: 3113
Joined: Sun Jan 13, 2008 3:31 pm UTC

Re: The greatest enemy of capitalism

Postby Ixtellor » Thu Jan 08, 2009 9:35 pm UTC

Rysto wrote:
debuggingRL wrote:Polluting of other people's property that causes harm can be treated as tresspassing.

What about air pollution? Who owns the air? Nobody, and that's at the root of the problem.


Not that I buy into total free market capitalism, but....

The argument is that if people polluted or did anything bad, you could sue them in court for damages.

In the case of air pollution, it would probably require a class action law suit, as you would need some serious capital to make the case that because company X contiminated the local atmosphere, you and others have proveable damages (lung cancer, etc).

Ixtellor
The Revolution will not be Twitterized.

Rysto
Posts: 1460
Joined: Wed Mar 21, 2007 4:07 am UTC

Re: The greatest enemy of capitalism

Postby Rysto » Thu Jan 08, 2009 9:42 pm UTC

Ixtellor wrote:The argument is that if people polluted or did anything bad, you could sue them in court for damages.

That can work, when one entity is producing enough pollution on their own to cause damages. In many cases, it's a huge group that is producing air pollution and only in aggregate is that a problem. The courts can't deal with that kind of problem.

User avatar
Ixtellor
There are like 4 posters on XKCD that no more about ...
Posts: 3113
Joined: Sun Jan 13, 2008 3:31 pm UTC

Re: The greatest enemy of capitalism

Postby Ixtellor » Thu Jan 08, 2009 9:42 pm UTC

Gunfingers wrote:...was, it turns out, its creator, Alexander Hamilton.

If you don't feel like reading the whole article (it is kind of long) the gist is that a truly free market has never existed in the US. The article blames this on Hamilton who, as Treasury Secretary, interpreted the "general welfare" clause to mean anything "in the public good", contrasting TJ's belief that it meant only the things enumerated in the constitution.

The article raises some interesting ideas. Is anyone here a historian in American Economics? How accurate is this?


1. Free market capitalism has never truely existed including in its earliest development in England. There is a GREAT book called "The Great Transformation" by Karl Polanyi, that did a lot of detailed analysis of how the British government was heavily involved in the emergence of free market capitalism. Polanyi's thesis is that it was planned.
So, it would seem that the OP's thesis that it didn't exist in America is dead on.

2. I doubt you could pin it on Hamilton. It isn't as if he was the only person in America who thought government could interfere in markets and trade. Import and Export taxes, particularly targeted ones, are a clear indication of government intervention and around since the very dawn of the nation.

When I have my time, I will give the article a good reading and post my thoughts on point 2, but I imagine it will be quite easy to find examples of other people in that first government who advocated government intervention in some sense.


Ixtellor
The Revolution will not be Twitterized.

User avatar
Ixtellor
There are like 4 posters on XKCD that no more about ...
Posts: 3113
Joined: Sun Jan 13, 2008 3:31 pm UTC

Re: The greatest enemy of capitalism

Postby Ixtellor » Thu Jan 08, 2009 9:49 pm UTC

Rysto wrote:
Ixtellor wrote:The argument is that if people polluted or did anything bad, you could sue them in court for damages.

That can work, when one entity is producing enough pollution on their own to cause damages. In many cases, it's a huge group that is producing air pollution and only in aggregate is that a problem. The courts can't deal with that kind of problem.


Then you can just sue collectively. For example simultaneously suing Ford, GM, Toyota, etc.

or

You file a class action law suit against a large polluter and pay millions in research to get a team of scientists to conclude "Company X is responsible for Y% of the pollution, therefore we seek Y% in damages compensation".

This conversation is WAY out there in the realm of speculative because it requires 2 things that do not exist in the same country.
1) Free Market Capitalism (technically doesn't exist on earth)
2) Legitimate court systems with liberal rules on filing claims of damages seeking monetary compensation.

For example, you might find some pockets of wild west capitalism in Africa, but you won't simultaneously find a court system in which you could sue. Versus very liberal courts (America) but no free market capitalism.

Ixtellor

P.S. Again I am just playing devils advocate. I don't believe in total free markets. (Human nature which I believe is inheriantly selfish, ruins it)
The Revolution will not be Twitterized.

Rysto
Posts: 1460
Joined: Wed Mar 21, 2007 4:07 am UTC

Re: The greatest enemy of capitalism

Postby Rysto » Thu Jan 08, 2009 9:59 pm UTC

Ixtellor wrote:Then you can just sue collectively. For example simultaneously suing Ford, GM, Toyota, etc.

You can't sue every driver in the country.

tgjensen
Posts: 145
Joined: Sat Dec 02, 2006 10:15 pm UTC

Re: The greatest enemy of capitalism

Postby tgjensen » Thu Jan 08, 2009 11:12 pm UTC

Yeah, exactly. EVERYBODY pollutes. Everybody would be suing everybody and, eyeing the opportunity for profit, everybody would become lawyers, suing and defending each other in a great big capitalist circle jerk going down the drain.

User avatar
william
Not a Raptor. Honest.
Posts: 2418
Joined: Sat Oct 14, 2006 5:02 pm UTC
Location: Chapel Hill, NC
Contact:

Re: The greatest enemy of capitalism

Postby william » Thu Jan 08, 2009 11:42 pm UTC

The assumption is that we want no pollution. This is a faulty assumption. The reality is that we want to reduce pollution.
SecondTalon wrote:A pile of shit can call itself a delicious pie, but that doesn't make it true.

User avatar
JayDee
Posts: 3620
Joined: Sat Nov 10, 2007 3:13 am UTC
Location: Most livable city in the world.
Contact:

Re: The greatest enemy of capitalism

Postby JayDee » Thu Jan 08, 2009 11:47 pm UTC

Jjarro wrote:Please, never suggest that Alexander Hamilton was the creator of capitalism.
You know, it wouldn't have occurred to me to call Hamilton a capitalist at all.

The article amuses me, mostly because I swear I've read articles that are the mirror image - talking about all the same stuff (Hamilton, Clay, Lincoln and so on) but singing their praises.
The Mighty Thesaurus wrote:I believe that everything can and must be joked about.
Hawknc wrote:I like to think that he hasn't left, he's just finally completed his foe list.

User avatar
d33p
Happy Fun Ball
Posts: 1714
Joined: Thu Oct 04, 2007 3:06 am UTC
Location: La Maison de la Liberté

Re: The greatest enemy of capitalism

Postby d33p » Fri Jan 09, 2009 2:47 am UTC

COMPLETELY off-topic, but Jay-Dee, I wholeheartedly approve of your moustache.
Parka wrote:I assume this is yours. I don't know anyone else who would put "kill a bear" on a list.

User avatar
Indon
Posts: 4433
Joined: Thu Oct 18, 2007 5:21 pm UTC
Location: Alabama :(
Contact:

Re: The greatest enemy of capitalism

Postby Indon » Fri Jan 09, 2009 4:19 am UTC

The article's approach seems somewhat silly and ranting, but at least it had historical insights which I can corroborate with other sources at my convenience.
So, I like talking. So if you want to talk about something with me, feel free to send me a PM.

My blog, now rarely updated.

Image

User avatar
Ixtellor
There are like 4 posters on XKCD that no more about ...
Posts: 3113
Joined: Sun Jan 13, 2008 3:31 pm UTC

Re: The greatest enemy of capitalism

Postby Ixtellor » Fri Jan 09, 2009 1:50 pm UTC

Rysto wrote:
Ixtellor wrote:Then you can just sue collectively. For example simultaneously suing Ford, GM, Toyota, etc.

You can't sue every driver in the country.


Um...

Which is true?
In the multi billion dollar law suit regarding smoking and its negative affects...
A) The plantiffs sued every smoker in America
B) The plantiffs sued just the producers of cigarette
C) The plantiffs sued the US government

Which brings me to my question...

Why on earth would you sue every driver in the country when its Ford and GM that make the pollution machines?

Ixtellor

P.S. Do you sue the owners of Ford Pintos or Ford when your car gets blowed up?
The Revolution will not be Twitterized.

User avatar
Mercurius
Posts: 310
Joined: Sat Jul 05, 2008 9:54 pm UTC
Location: Dorset
Contact:

Re: The greatest enemy of capitalism

Postby Mercurius » Sat Jan 10, 2009 5:42 pm UTC

Ixtellor wrote:
Gunfingers wrote:...was, it turns out, its creator, Alexander Hamilton.

If you don't feel like reading the whole article (it is kind of long) the gist is that a truly free market has never existed in the US. The article blames this on Hamilton who, as Treasury Secretary, interpreted the "general welfare" clause to mean anything "in the public good", contrasting TJ's belief that it meant only the things enumerated in the constitution.

The article raises some interesting ideas. Is anyone here a historian in American Economics? How accurate is this?


1. Free market capitalism has never truely existed including in its earliest development in England. There is a GREAT book called "The Great Transformation" by Karl Polanyi, that did a lot of detailed analysis of how the British government was heavily involved in the emergence of free market capitalism. Polanyi's thesis is that it was planned.
So, it would seem that the OP's thesis that it didn't exist in America is dead on.


God, Polanyi. There is a name I never expected to read outside of an academic text. I'm sadly only aware of his work through references others have made to him, but what I have read seems convincing.

As I recall, his thesis was that the emerging industrial revolution was structurally mismatched with the existing social structure, and so the government took steps to break up that pre-industrial way of life, as to make the emerging economic order the only option open to the recently disenfranchised peasantry/the new urban working class. Or something like that. Either way, it was interesting.
You know, I'm not really sure what "socioeconomic class" I am. I'm richer than my parents, I don't have a real job, and my mannerisms tend to match up with whomever I'm talking to.

...is "con man" a social class?

User avatar
BoomFrog
Posts: 1070
Joined: Mon Jan 15, 2007 5:59 am UTC
Location: Seattle

Re: The greatest enemy of capitalism

Postby BoomFrog » Sun Jan 11, 2009 1:30 am UTC

Besides, what about wildlife preserves. No one can sue to protect them. Pure capitalism would have them auctioned off. The only way they could be preserved would be if a charity collects money to buy the to protect them. The reality would be that they all get clear cut. There are just some basic things you need a government to do.
"Everything I need to know about parenting I learned from cooking. Don't be afraid to experiment, and eat your mistakes." - Cronos

User avatar
Gunfingers
Posts: 2401
Joined: Wed May 30, 2007 7:15 pm UTC

Re: The greatest enemy of capitalism

Postby Gunfingers » Sun Jan 11, 2009 1:59 am UTC

I don't think you guys understand the difference between free market capitalism and anarchocapitalism.

Rysto
Posts: 1460
Joined: Wed Mar 21, 2007 4:07 am UTC

Re: The greatest enemy of capitalism

Postby Rysto » Sun Jan 11, 2009 2:07 am UTC

Ixtellor wrote:Why on earth would you sue every driver in the country when its Ford and GM that make the pollution machines?

Because the driver is actually creating the pollution?

Spuddly
Posts: 264
Joined: Sat Mar 01, 2008 7:11 pm UTC

Re: The greatest enemy of capitalism

Postby Spuddly » Sun Jan 11, 2009 10:30 am UTC

Rysto wrote:
debuggingRL wrote:Polluting of other people's property that causes harm can be treated as tresspassing.

What about air pollution? Who owns the air? Nobody, and that's at the root of the problem.


Yeah, sell the air. If something is owned, it's less likely to be ruined.

In fact, many negative externalities are treated with quasi-market solutions, like cap & trade emissions or fishing quotas. The idea being that efficient businesses can sell their units of pollution to other businesses. If I'm great at growing trees, and you're great at burning coal, doesn't it make sense that I could trade my growing trees for your smog? That way, there is less pollution and more internet time for all.

The freest economies have been in south east asian countries, like Taiwan or Singapore. Singapore is usually ranked the highest for free markets on those sort of indexes.
Give me your eyes;
I need sunshine.

User avatar
Ixtellor
There are like 4 posters on XKCD that no more about ...
Posts: 3113
Joined: Sun Jan 13, 2008 3:31 pm UTC

Re: The greatest enemy of capitalism

Postby Ixtellor » Mon Jan 12, 2009 2:41 pm UTC

Gunfingers wrote:I don't think you guys understand the difference between free market capitalism and anarchocapitalism.


1) Where did anyone advocate eliminating the government?
2) Did you have a point other than "I think I am smarter than you guys."


Ixtellor
The Revolution will not be Twitterized.

User avatar
Indon
Posts: 4433
Joined: Thu Oct 18, 2007 5:21 pm UTC
Location: Alabama :(
Contact:

Re: The greatest enemy of capitalism

Postby Indon » Mon Jan 12, 2009 5:40 pm UTC

Gunfingers wrote:I don't think you guys understand the difference between free market capitalism and anarchocapitalism.


One has an inaccurate name and the other can't possibly ever work?
So, I like talking. So if you want to talk about something with me, feel free to send me a PM.

My blog, now rarely updated.

Image

User avatar
Gunfingers
Posts: 2401
Joined: Wed May 30, 2007 7:15 pm UTC

Re: The greatest enemy of capitalism

Postby Gunfingers » Tue Jan 13, 2009 2:54 am UTC

Ixtellor wrote:
Gunfingers wrote:I don't think you guys understand the difference between free market capitalism and anarchocapitalism.


1) Where did anyone advocate eliminating the government?
2) Did you have a point other than "I think I am smarter than you guys."


Ixtellor


1)Anarchocapitalism amounts to "anything a business does is legal" and seems to be what you think this article is advocating. It's not anarchy, it's just the most extreme version of laissez-faire economics. Free market capitalism, at least as i (and, i think, the author of the article) see it, is an application of libertarianism to economics. Laws exist to preserve rights, and whatnot. By this logic things like legislating sanitation in restaurants or safety/cleanliness in automobiles is not outside the realm of free-market capitalism. Corporate protectionism, corporate welfare, and tariff/excise crap is. At least that's what i got out of the article.
2)While it had little to do with the "point" of the post (i don't think i've done or said anything on these boards with a "point". I'm a very whimsical guy) that is the assumption i always operate under. :P

User avatar
mosc
Doesn't care what you think.
Posts: 5404
Joined: Fri May 11, 2007 3:03 pm UTC

Re: The greatest enemy of capitalism

Postby mosc » Thu Jan 15, 2009 5:35 pm UTC

Marx wrote a great deal on the problems of free market capitalism. I would reference his works in backing up the thesis that says a pure free market is a bad idea. The US, as it has grown, has needed more regulation and a more centralized government. Even Alexander Hamilton (who I will agree was far from a pure capitalist) would not have foreseen the necessary controls and regulations in today's market system.
Title: It was given by the XKCD moderators to me because they didn't care what I thought (I made some rantings, etc). I care what YOU think, the joke is forums.xkcd doesn't care what I think.

User avatar
frezik
Posts: 1336
Joined: Wed Jan 10, 2007 7:52 pm UTC
Location: Schrödinger's Box

Re: The greatest enemy of capitalism

Postby frezik » Thu Jan 15, 2009 6:19 pm UTC

BoomFrog wrote:Besides, what about wildlife preserves. No one can sue to protect them. Pure capitalism would have them auctioned off. The only way they could be preserved would be if a charity collects money to buy the to protect them.


Ted Turner does that with his fortune.

I always thought that the Free Market works best when goods are roughly the same (e.g., cotton is pretty much the same no matter where you get it from), and buyer and seller have equal knowledge. Once you get into more complex goods, like cars and computers, it becomes harder to make a case for the Free Market on the basis that it makes for the most efficient outcome.
I do not agree with the beer you drink, but will defend to the death your right to drink it

Rysto
Posts: 1460
Joined: Wed Mar 21, 2007 4:07 am UTC

Re: The greatest enemy of capitalism

Postby Rysto » Thu Jan 15, 2009 7:23 pm UTC

frezik wrote:I always thought that the Free Market works best when goods are roughly the same (e.g., cotton is pretty much the same no matter where you get it from), and buyer and seller have equal knowledge.

Two of the conditions for the efficiency of the free market are perfect substitutes(i.e. all goods are identical) and perfect knowledge(i.e. all actors in the market know everything relevant).

btilly
Posts: 1877
Joined: Tue Nov 06, 2007 7:08 pm UTC

Re: The greatest enemy of capitalism

Postby btilly » Thu Jan 15, 2009 7:38 pm UTC

Jjarro wrote:Please, never suggest that Alexander Hamilton was the creator of capitalism. I would, however, agree that he did more than any other man in history to stack the deck in the United States system in favor of regulation and central control.

I think a stronger case can be made for Franklin D. Roosevelt. See the gold confiscation, New Deal, Social Security, and the changes made to the interpretation of the Commerce Clause.

Not that he didn't have some good reasons for what he did.
Some of us exist to find out what can and can't be done.

Others exist to hold the beer.

i.t.homp
Posts: 29
Joined: Fri May 30, 2008 11:13 pm UTC

Re: The greatest enemy of capitalism

Postby i.t.homp » Thu Jun 11, 2009 12:37 am UTC

Gunfingers wrote:
Ixtellor wrote:
Gunfingers wrote:I don't think you guys understand the difference between free market capitalism and anarchocapitalism.


1) Where did anyone advocate eliminating the government?
2) Did you have a point other than "I think I am smarter than you guys."


Ixtellor


1)Anarchocapitalism amounts to "anything a business does is legal" and seems to be what you think this article is advocating. It's not anarchy, it's just the most extreme version of laissez-faire economics.


The extreme version of laissez-faire capitalism isn't quite this. You're right that it is the Libertarianism applied to economics, however, we mustn't forget what the great Libertarian Ayn Rand (I'm 99% sure it was her) said. She said [paraphrased as I don't remember the original exactly] that laissez-faire capitalism is a free market. This means that the individual is free to act however they want, without governemtn intervention, until they infringe on the rights of others. This is where the government comes in. The government must exist to protect the rights of the individual. Someone mentioned farther up that human selfishness ruins the whole thing. In actual fact [according to Rand, with whom I'm inclined to agree] human selfishness leads to virtue. If each person acts in their own self-interest, they inadvertently create a better environment for everyone. For example, there are 2 shoemakers. One makes mediocre shoes, and the other makes good shoes. The mediocre shoemaker strives to be the best, therefore creating a better product, and he sells this product at a competitive price. The good shoemaker now competes with the first, and capitalism is at work. They are both striving to meet the demands of the consumer, and as a result, they create a better product at a lower price, which is a good thing for everyone. I'm not sure if I just made a point, or just stated a bunch of facts and my opinion. Nonetheless...enjoy.

Thompson
I've broken all your spatulas, because I knew no-one would admit themselves!

User avatar
frezik
Posts: 1336
Joined: Wed Jan 10, 2007 7:52 pm UTC
Location: Schrödinger's Box

Re: The greatest enemy of capitalism

Postby frezik » Thu Jun 11, 2009 2:16 am UTC

Necro much? Ahh, whatever.

i.t.homp wrote:The extreme version of laissez-faire capitalism isn't quite this. You're right that it is the Libertarianism applied to economics, however, we mustn't forget what the great Libertarian Ayn Rand (I'm 99% sure it was her) said.


To be pendantic, Ayn Rand rejected Libertarianism. She started Objectivism, which definately influanced Libertarians, but Rand considered Objectivisim to be an all-or-nothing. She saw Libertarianism as only going part way.

Moving on:

If each person acts in their own self-interest, they inadvertently create a better environment for everyone. For example, there are 2 shoemakers. One makes mediocre shoes, and the other makes good shoes. The mediocre shoemaker strives to be the best, therefore creating a better product, and he sells this product at a competitive price. The good shoemaker now competes with the first, and capitalism is at work. They are both striving to meet the demands of the consumer, and as a result, they create a better product at a lower price, which is a good thing for everyone. I'm not sure if I just made a point, or just stated a bunch of facts and my opinion. Nonetheless...enjoy.

Thompson


Where these things tend to fall apart is in larger systemic problems. Here's a real-world example that happened a little while ago. Google News picked up an old article about an airline bankruptcy. The article didn't orginally come with a date, so Google defaulted to setting it as the current date. A bunch of automatic stock trading scripts picked it up and started shorting the company's stock. Seeing the sudden drop in price, a bunch of other automatic trading scripts started going long, bringing it almost back to where it was.

What's remarkable here is that each piece is just doing its job and working in its own best interest. I suppose either Google or the newspaper could be more careful about publishing undated articles, but I doubt either one could have anticipated this happening, and from a strictly laissez-faire perspective, it's not their problem if an airline's stock goes crazy.

(The other remarkable thing is here is that you could have Neal Stephenson write it into Snow Crash and nobody'd notice.)

I'd also argue that it's exactly this sort of systemic problem that led to the housing crisis.
I do not agree with the beer you drink, but will defend to the death your right to drink it

User avatar
LuNatic
Posts: 973
Joined: Thu Nov 20, 2008 4:21 am UTC
Location: The land of Aus

Re: The greatest enemy of capitalism

Postby LuNatic » Thu Jun 11, 2009 3:01 am UTC

A very long time ago, Darkscull wrote:Huh, I always thought it was logic, reason and human kindness :razz:


You and me both.
Cynical Idealist wrote:
Velict wrote:Good Jehova, there are cheesegraters on the blagotube!

This is, for some reason, one of the funniest things I've read today.

User avatar
Crius
Posts: 392
Joined: Thu Feb 12, 2009 7:27 pm UTC

Re: The greatest enemy of capitalism

Postby Crius » Thu Jun 11, 2009 3:14 pm UTC

frezik wrote:Where these things tend to fall apart is in larger systemic problems. Here's a real-world example that happened a little while ago. Google News picked up an old article about an airline bankruptcy. The article didn't orginally come with a date, so Google defaulted to setting it as the current date. A bunch of automatic stock trading scripts picked it up and started shorting the company's stock. Seeing the sudden drop in price, a bunch of other automatic trading scripts started going long, bringing it almost back to where it was.

What's remarkable here is that each piece is just doing its job and working in its own best interest. I suppose either Google or the newspaper could be more careful about publishing undated articles, but I doubt either one could have anticipated this happening, and from a strictly laissez-faire perspective, it's not their problem if an airline's stock goes crazy.


Your example here isn't people acting in their best interests though - it's an example of computer programs making bad decisions. Do you think it was in Google's best interests to display out of date information? It's not their problem if an airline's stock goes crazy, but it is a problem if people don't trust the accuracy of their articles. Also, it's not in the stock trader's best interests to trade on insufficient information.

Human's aren't perfect of course, and will make bad decisions from time to time. That's going to be the reality in any system made out of humans. One thing a free market tends to do well, though, is to punish those who make bad decisions.

User avatar
Indon
Posts: 4433
Joined: Thu Oct 18, 2007 5:21 pm UTC
Location: Alabama :(
Contact:

Re: The greatest enemy of capitalism

Postby Indon » Thu Jun 11, 2009 4:49 pm UTC

i.t.homp wrote:In actual fact [according to Rand, with whom I'm inclined to agree] human selfishness leads to virtue.

I take the position that it's non-actual fact, myself. Thesaurus.com lists 'fictitious' as an antonym of 'actual', so I'll go with that.

A fictitious fact.

i.t.homp wrote:If each person acts in their own self-interest, they inadvertently create a better environment for everyone. For example, there are 2 shoemakers. One makes mediocre shoes, and the other makes good shoes. The mediocre shoemaker strives to be the best, therefore creating a better product, and he sells this product at a competitive price. The good shoemaker now competes with the first, and capitalism is at work. They are both striving to meet the demands of the consumer, and as a result, they create a better product at a lower price, which is a good thing for everyone.

And that's a wonderful idealistic scenario.

Allow me to state an equally likely scenario (arguably, more likely given the argument's premise).

There are two shoemakers. One makes mediocre shoes, and the other makes good shoes. The mediocre shoemaker murders the good shoemaker and covers up the crime by bribing the police. The mediocre shoemaker then raises his prices while producing lower-quality shoes, and it's quite some time until someone else decides to open up a shoemaking outfit in the area - at which point, the mediocre (now bad) shoemaker just takes out his leatherman for another bloody job - a cycle which can continue indefinitely, since everyone still alive is working in their own self-interest.

The shoemaker/murderer benefits immensely by establishing a monopoly over shoes. The policemen benefit from bribes. The consumers of shoes and law, of course, do not benefit, but they are irrelevant because they are unaware of the situation. :(
So, I like talking. So if you want to talk about something with me, feel free to send me a PM.

My blog, now rarely updated.

Image


Return to “News & Articles”

Who is online

Users browsing this forum: No registered users and 7 guests