• Capatalism and Communism. (Which is best?)
    481 replies, posted
[QUOTE=wakarimasen;35429768]Comrade, first, as a note, I'd like to point the fact that Russia had [b]not[/b] undergone a bourgeoisie revolution prior to the proletariat revolution, and, as a result, there was little to no actual bourgeoisie (it was very feudal). Bourgeoisie socialism is counter-revolutionary, plain and simple. The proletariat need to hold political power. Whereas the Kadets and SR's wanted to strengthen the bourgeoisie in a state with little-to-none, Bolsheviks wanted to seek a gradual increase to the dictatorship of the proletariat. Lenin's 'coup' was clearly supported by the workers and soldiers, after all, and it gained the support as the civil war dawned (the whites, at their height, were outnumbered by the reds, at their height). Not everyone subjugated to the "Red Terror" was bad, but they did [b]FAR LESS[/b] than what the Czechs, Ukrainian "anarchist" war lord, White czarists, and SR bastards did. Who could blame them for being cautious as hundreds of thousands of innocents were being slaughter by the ruthless counter-revolutionaries? Lenin? A dictator? Are you kidding me? He was elected chair by the Congress of Soviets, and never had absolute say. Russia was practically in anarchy (not "enlightened" per se, but in total chaos) and any "authoritarian" measures by Lenin (War Communism) arose due to material conditions. Stop being so unscientific (but hey, what does one expect from the ultra-left). Lol, once again, with the whole distinction between socialism and communism. Marx never made such a thing - "the transition stage" is Marxist-Leninist crap to justify Stalin's state capitalism and strong bureaucracy.[/QUOTE] The February Revolution was (at least had it more time to continue on its course) the bourgeoisie revolution. This was commonly considered such by prominent leftists on all sides. Socialism is socialism, comrade. While some socialism is less controlled by the workers than other forms, the February Revolution marked the beginning of the most worker influenced capitalist nation of the time- far better than Lenin's state and Stalin's state, even considering the food shortages caused by the war. The SRs, and to a lesser extent the Kadets, looked to make the best of the revolution and the political currents. To use your phrases, it was the material conditions that justified working in the Kerensky government. No one else at the time dreamed of starting another revolution so shortly after the masses had just made such huge strides, shaking off the grip of the tsar. The new society was being built in the chaos, and the Bolshevik's answer, when the state denied still the worker's full control, was to use two issues- the war and the lack of worker's control- to take power for themselves, drive away all allies short of some anarchists (later murdered) and some SRs (later imprisoned), and then create an even longer war and give workers even less control. I've already told you you can't justify the massacre of thousands based on ideology, even in response to the same action. That's a moral no-no and I'm not going to argue that anymore. Lenin had huge amounts of sway in the oligarchical Congress. While he didn't have full control, he had the strongest voice in a group of people who were chosen not through democracy, but through imprisonment and elimination of opponents and self-appointment of themselves to oversee, with full control and power that never dissipated, the masses. Actually, Marx did make distinctions. His historical materialism plotted that the natural means of progression would be a socialist state, then communism. The phase of the dictatorship of the proletariat to the phase of a classless, stateless society. It's clearly talked about by Marx multiple times, with clear distinctions between the society of communism and the state of socialism. To not distinguish the two is silly and directly contradicting part of Marxism (and indeed, Leninism. Lenin made quite the case for the withering of the state through the dictatorship of the proletariat until it was non-existent, in State and Revolution).
Why the so-called "Communist" countries of the 20th century failed, and why they ought not be considered as evidence against marxism/communism/socialism. No doubt we've all heard people say "the USSR was not communist" in retaliation to opponents decrying communism on the basis of totalitarianism. That's an entire different discussion on its own, but what would Marx have to say about this topic? The first thing you need to know about Marx is that he wasn't some anti-capitalist hippie who opposed modern society and owning things. Nobody admired the creations of capitalism more so than Karl Marx. Marx's critique of capitalism (and society in general under that banner of capitalism) was generally scientific, rather than ethical. Marx stated that the cause for a shift in economic mode of production (the various forms of an economy that we know as capitalism, socialism, communism, feudalism, etc.) was a shift in the means of production (the tools used to produce a commodity, such as the steam engine, the spinning jenny, etc.). Each time that the means of production improved, the economy (and consequently, society as a whole) who advance to meet this new way of creating and producing. Generally, when the means of production improved, a more liberal restructuring of society came along with it, or vice-versa. With the improving means of production also came improved means of communication, improved transportation, greater commercial activity, and through this: spreading ideas of democracy. The result of this was the enlightenment, and the result of THIS was widespread political upheaval against the monarchies and religious aristocracies of the previous centuries. The relationship between commerce and liberalism is best illustrated through this map of the salem witch trials: [img]http://edwin.sjfc.edu/ndemarco/unitplan/salemmap.jpg[/img] We see that the west village did the accusing while the east village played the role of the accused. The west village, which was further away from seaports (and therefore commerce) held more conservative values. Around this time, women had been granted the right to inherit property, church attendence was decreasing (which resulted in lowered standards for membership), and society as it was when salem was first founded was being shaken. The conflict between the older west village and the newer east village resulted in the west village accusing women who came into ownership of their deceased fathers' property of witchcraft (one could draw parallels to this and McCarthyism). It stands to reason, then, that improved means of production (which include the means of communication and transportation, as these are used in production) result in the spread of democratic ideas. It was only natural, then that the industrial revolution, urbanization, and the rise of advanced capitalism follow the revolutions and civil wars of the 17th and 18th centuries, carrying into the early 19th century. The ability to produce more of a needed product with less work meant that the individual needed less guidance than before, and the authority of the monarch and the church broke down in favor for the authority of the economy. To dive further into this idea of organization vs. appropriation, look to the fall of rome. After the fall of rome, there was a massive loss of organization in europe and the middle east. Commerce skidded to a halt, communication was silenced, and everything stood still. The Library of Alexandria was lost, hundreds of years of civilization erased, and individuals were forced to collect themselves into smaller, feudal groups. With the loss of the means of production of rome came a less centralized, religiously controlled feudal system with very low standards of individual freedom. Upon recovery through economic means, the feudal system of lords and serfs fell to capitalism, and the less centralized lords became the monarchies of europe. The common element we see is the ability to appropriate resources efficiently. In pre-historic times, the ability to collect food and other resources was so limited that society had to be organized into tightly-knit hunter-gatherer tribes in which an individual's attempts at personal liberty were met with religious backlash or that individual's failure to gather the required resources for himself. as the ability to appropriate resources became easier, population would increase, tribes would enter into association, nations would be formed, and individual freedom increased ever so gradually. The tribal leader became the king or lord, and the tribal shaman became the priest or pope. So how does this connect to capitalism? In the 19th century, the unlimited forces of free market capitalism resulted constantly in overproduction. Overproduction was a result of the means of production being improved to the point where efficiency had overcome necessity, and the market becomes saturated. If, for example, all the farms and farming corporations in the country produce as much food as they possibly can to maximize profit, then the means of production will get to a point where they will produce so much food that, in combination with all other farms and farming corporations, they will produce more food than is needed to be consumed. Even though food is a perishable product, overproduction will repeat itself next harvest because the means of production will only improve. Take a nonperishable product, for example (a widget). There is demand for Widgets, so the factory owner produces them. However, other factory owners also produced widgets to try to compete with one-another, and they produce so many widgets that the supply is now greater than the demand, and the product is now nearly worthless. The factory owner will stop production until he can sell off his stockpile of widgets. To stop production, the factory owner must fire X workers and close X factories. After the factory owner sells his stockpile, he re-opens his factories and starts producing more widgets. The problem is so has every other factory owner, and overproduction happens again. This cycle is described by Marx as "boom and bust", and is the prime characteristic of capitalism outgrowing itself. Just as every other economic mode of production and organization of society was outdone by improved means of production, so will, marx argues, capitalism. Taking the overproduction of food, for example, and applying saturation of the market to it, the value of all economic factors drop with such an overproductive bubble. An unemployed family goes hunry at night, and one child asks his father "Dad, why don't we have anything to eat?", to which the father replies "because there is too much food". At this point, the means of production, and the organization of capitalism have come into conflict and must result in the change of one or the other. hopefully I haven't lost you because here is the central point: Communism/socialism rely on the ability for the market to overproduce. The fact that there is plenty of food to go around result, logically, in questioning why we have to appropriate our resources by the direction of the capitalist. If there is more food than we know what to do with, why do we need direction in appropriating it like we did when there WASNT enough food to go around back in feudalism, or the tribal days? Why do we recognize the authority of money when there is so much food that it's literally worthless, and we could just give it away and there would still be too much? in fact, why DONT we just give it away? Because of the bourgeois, thats why. The only thing keeping us from feeding every person in the country is these aristocratic fucks who only want more money for themselves, just like the monarchs that we overthrew a hundred years ago, just like the pope who we stopped listening to a while ago, just like everybody else who told us what to do years before. Here's where we tie it all together: Russia was nowhere near the point of over-production in 1917. Russia was made up of a lot of rural peasantry, and serfdom was abolished in russian only about 50 years prior, whereas serfdom had died out in england in the 15th-16th centuries (Philip Iv, Louis X, and Philip V had de facto ended serfdom in the very early 14th century, and had ceased to exist in france by the 15th century. serfdom was rare in western europe but grew in eastern europe after the renaissance). Russia was nowhere near the ability to, as an entire empire, overproduce products to the point of saturation. As for 3rd world/colonial countries like China, Vietnam, Korea, Cambodia, and the rest of eastern europe, africa, latin america, and the middle east, it needs little explaination as to the state of economics in each region and how close they were to surplus manufacturing. The result of forced collectivization in countries that aren't economically "ripe" for communism/socialism results in either a semi-democratically run, but completely innefficient beauracracy (Lenin's USSR) or a totalitarian hellhole which appropriates resources at a very high death rate (Stalin's Russia, Mao's China, Kim's North Korea, and above all other examples: Pol Pot's Cambodia.) Marx envisioned the revolution to take place in western europe in countries like France, Germany, or England. The failures thereof are an entirely different matter which I can go into at a later date.
False choice if you ask me. I like capitalism, but it shouldn't be applied to everything. I don't think people should be forced to pay or die. Life should be a right, and that includes healthcare. a mixed capitalist-socialist system seems to be the right way to go. edit: Great read above, thanks for your effort.
Very good read and very true, prooboo.
Capitalism. Everyone should be able to conduct business the way they want to and be successful. Just think, if we had to have 15 permits filled out to open a lemonade stand.. oh wait...
[QUOTE=SuperElektrik;35454586]Capitalism. Everyone should be able to conduct business the way they want to and be successful. Just think, if we had to have 15 permits filled out to open a lemonade stand.. oh wait...[/QUOTE] Implying that capitalism provides more economic freedom than worker self management.
[QUOTE=prooboo;35430954]<Text>[/QUOTE] I don't necessarily agree with you. And I am very much against unfree markets. But this rationally delivered explanation was very refreshing.
[QUOTE=Derubermensch;35462082]I don't necessarily agree with you. And I am very much against unfree markets. But this rationally delivered explanation was very refreshing.[/QUOTE] The thing about communism is that it's not an unfree market, it's simply a different mode of production. Communism doesnt demonize personal wealth, but instead states that the business model of capitalism requires a level of greed that is destructive in its means. Communism is a mode of production in which the owners of the means of production are the ones who USE the means of production. In this way, the means of production are ultimately used to produce products rather than produce profit. Because of this, production is transitive to necessity and unemployment coincides with surplus.
[QUOTE=prooboo;35462951]The thing about communism is that it's not an unfree market, it's simply a different mode of production. Communism doesnt demonize personal wealth, but instead states that the business model of capitalism requires a level of greed that is destructive in its means. Communism is a mode of production in which the owners of the means of production are the ones who USE the means of production. In this way, the means of production are ultimately used to produce products rather than produce profit. Because of this, production is transitive to necessity and unemployment coincides with surplus.[/QUOTE] In a perfect world this is how an economy would naturally work. However, this is not the case. Ultimately monetary incentive, which spawns labor management, promotes the most efficient possible mode of production. Any attempt to use any means contrary to that of the traditional free market would involve constant coercion, as human nature simply doesn't change. Therefore, in theory, the original communist ideal would be a free market. In practice, however, attempts at communism can only end up as police states or eventually morph into traditional free economies.
Capitalism is peaceful and allows some members to become super-rich, but thrives off of individuality, not teamwork on a broad scale, in a sense depreciating the value of the country as compared to where everyone could work together and achieve more, and also allows some members to become super-poor. Communism calls for the overthrow of Capitalism everywhere and will prevent economic inequality, but utilizes a team environment across an entire country to make it more productive, and gives a brain surgeon who is earning the salary of a ditch digger no incentive to work harder. Capitalism is risky compared to the stability offered by Communism, but Capitalism gives a bigger chance of a huge payoff while Communism prevents economic hardships better than Capitalism. Goods and bads all across the spectrum. Make your choice. [sp]Communist Democracy is best democracy[/sp]
[QUOTE=J$ Psychotic;35513578]Capitalism is peaceful and allows some members to become super-rich, but thrives off of individuality, not teamwork on a broad scale, in a sense depreciating the value of the country as compared to where everyone could work together and achieve more, and also allows some members to become super-poor. Communism calls for the overthrow of Capitalism everywhere and will prevent economic inequality, but utilizes a team environment across an entire country to make it more productive, and gives a brain surgeon who is earning the salary of a ditch digger no incentive to work harder. Capitalism is risky compared to the stability offered by Communism, but Capitalism gives a bigger chance of a huge payoff while Communism prevents economic hardships better than Capitalism. Goods and bads all across the spectrum. Make your choice. [sp]Communist Democracy is best democracy[/sp][/QUOTE] Wait, no one has ever advocated for equal wage sin communism. A brain surgeon would never be purposefully paid equal to a ditch digger. That's a common misconception (prevalent in people who don't know about communism). And capitalism only gives chances of a huge payoff to those who exploit or control. You can still get rich in a worker self-management free market, but socialism makes sure you can't get too poor, and the self-management makes sure that that money can't be used to profit or exploit. Economic inequality isn't the issue, economic exploitation and economic slavery is. As long as there is no slavery, hunger, poverty, and exploitation, then you can make loads of money in a communist system.
[QUOTE=J$ Psychotic;35513578]Capitalism is peaceful and allows some members to become super-rich, but thrives off of individuality, not teamwork on a broad scale, in a sense depreciating the value of the country as compared to where everyone could work together and achieve more, and also allows some members to become super-poor. Communism calls for the overthrow of Capitalism everywhere and will prevent economic inequality, but utilizes a team environment across an entire country to make it more productive, and gives a brain surgeon who is earning the salary of a ditch digger no incentive to work harder. Capitalism is risky compared to the stability offered by Communism, but Capitalism gives a bigger chance of a huge payoff while Communism prevents economic hardships better than Capitalism. Goods and bads all across the spectrum. Make your choice. [sp]Communist Democracy is best democracy[/sp][/QUOTE] First off, a democratic society that seeks to have pure socialism will ultimately fail. Self interest and how it dictates into highly centralized power would all but indicate that eventually voters would just create a gigantic pseudo-corporatistic system (like how the USA has become to morph after a century of the federal government being given so much power over the economy), or that it would eventually evolve into a capitalistic society (Russia after glasnost and perestroika). Anyone who thinks that a democratic process would guarantee a socialist society is delusional. Socialism can only be achieved through coercive processes, and no human government can guarantee such proper and intended usage of coercive powers.
Communism tries to create a social utopia assuming the people are capable of one. But if the people are all capable of functioning a utopia, then the government systems is obsolete. Capitalism works just because its a self-sustaining system. Communism from a standpoint of ethics is in reality more appealing, but when practicality comes around, Communism has had a history of breaking down into a totalitarian state because, sadly, no one is ready for a utopia.
[QUOTE=Derubermensch;35490030]In a perfect world this is how an economy would naturally work. However, this is not the case. Ultimately monetary incentive, which spawns labor management, promotes the most efficient possible mode of production. Any attempt to use any means contrary to that of the traditional free market would involve constant coercion, as human nature simply doesn't change. Therefore, in theory, the original communist ideal would be a free market. In practice, however, attempts at communism can only end up as police states or eventually morph into traditional free economies.[/QUOTE] Well monetary incentive does promote maximum efficiency in capitalism, but that's exactly the problem. Maximum efficiency in an unregulated market results in overproduction and market saturation. Regulation results in globalism/imperialism.
[QUOTE=prooboo;35529496]Well monetary incentive does promote maximum efficiency in capitalism, but that's exactly the problem. Maximum efficiency in an unregulated market results in overproduction and market saturation. Regulation results in globalism/imperialism.[/QUOTE] Not necessarily: given a few decades, a free-market economy would only have as much supply as there is demand. And market saturation isn't necessarily a bad thing. At least then stability and long-term growth are guaranteed. Overproduction wouldn't be a problem in a free market because you can't have overproduction without overinvestment. Overinvestment can realistically only result from things like government subsidies, artificially low interest rates, inflation, etc.
[QUOTE=Derubermensch;35529775]Not necessarily: given a few decades, a free-market economy would only have as much supply as there is demand. And market saturation isn't necessarily a bad thing. At least then stability and long-term growth are guaranteed. Overproduction wouldn't be a problem in a free market because you can't have overproduction without overinvestment. Overinvestment can realistically only result from things like government subsidies, artificially low interest rates, inflation, etc.[/QUOTE] Overinvestment occurs naturally in economic bubbles and when the means of production have been developed to a point of surplus and the collective forces of the economy are producing enough to satisfy their own needs on an individual basis but collectively saturate the market. Improvements in technology and rising levels of productivity increase the amount of material wealth in society while simultaneously diminishing the economic value of this wealth, thereby lowering the rate of profit - a tendency that leads to the paradox, characteristic of crises in capitalism, of &#8220;poverty in the midst of plenty,&#8221; or more precisely, crises of overproduction in the midst of underconsumption. Overproduction IS necesarrily a bad thing because it results in a cycle of massive production followed by massive unemployment.
I have to say I came in here very skeptical of communism but have changed my opinion. After reading the thread it seems that people supporting capitalism keep rehashing the same arguments of "it sounds nice on paper but doesn't work in reality" , "it's just human nature", and "it's a utopia". I think the people supporting communism have adequately dealt with these claims already and it's disappointing to see these same claims repeated endlessly in here.
[quote]Overproduction wouldn't be a problem in a free market because you can't have overproduction without overinvestment. Overinvestment can realistically only result from things like government subsidies, artificially low interest rates, inflation, etc. [/quote] 'Overinvestment' is a relative term that merely reflects the falling rate of profit, that doesn't help us understand anything, let alone convince anybody 'it's not a problem'. It's like a very, very late warning. Free markets would be the most vulnerable to overproduction and a falling rate of profit, which would ultimately correct itself in a destructive deflationary cycle and simultaneously evoking a fierce friction with its true constituents, labor. This is where libertarianism/anarcho-capitalism fades into irrelevance as the capitalist state tries its hardest to restore the rate of profit and subdue the class struggle through welfarist concessions to workers. That is presuming it doesn't fall to revolutionary workers, or worse, capitulates to fascists. From there we arrive to the modern liberal state, and with it a system far better equipped to maintain capitalism than the libertarians' and whatever monstrosity 'anarcho-capitalists' produce.
[QUOTE=prooboo;35530808]Overinvestment occurs naturally in economic bubbles and when the means of production have been developed to a point of surplus and the collective forces of the economy are producing enough to satisfy their own needs on an individual basis but collectively saturate the market. Improvements in technology and rising levels of productivity increase the amount of material wealth in society while simultaneously diminishing the economic value of this wealth, thereby lowering the rate of profit - a tendency that leads to the paradox, characteristic of crises in capitalism, of &#8220;poverty in the midst of plenty,&#8221; or more precisely, crises of overproduction in the midst of underconsumption. Overproduction IS necesarrily a bad thing because it results in a cycle of massive production followed by massive unemployment.[/QUOTE] Note: It would be wrong to use any time period of the last century-and-a-half as a citation on the failures of capitalism, because a scientific analysis of capitalism has been sullied by government tampering of money and production to the point that we can only work on a theoretical basis. Such changes in the economy, such as surplus and overproductivity, can't really happen, such imbalances would happen so slowly and mildly that the economy would be able to "do the tango" with such changes. You would be making a mistake in assuming economic bubbles are natural to an economy. People wouldn't partake in deals and practices bound to fail out of self interest. The reason we get bubbles is because of government incentives that encourage people to make self-destructive decisions.
[QUOTE=Derubermensch;35535208]Note: It would be wrong to use any time period of the last century-and-a-half as a citation on the failures of capitalism, because a scientific analysis of capitalism has been sullied by government tampering of money and production to the point that we can only work on a theoretical basis. Such changes in the economy, such as surplus and overproductivity, can't really happen, such imbalances would happen so slowly and mildly that the economy would be able to "do the tango" with such changes. You would be making a mistake in assuming economic bubbles are natural to an economy. People wouldn't partake in deals and practices bound to fail out of self interest. The reason we get bubbles is because of government incentives that encourage people to make self-destructive decisions.[/QUOTE] Counternote: we live in a capitalist mode of production, so using evidence from the past century and a half is completely okay. Even then, The US was largely Laissez-faire for the 20's and the 19th century examples of economic bubbles in capitalism: [url]http://en.wikipedia.org/wiki/Tulip_mania[/url] [url]http://en.wikipedia.org/wiki/South_Sea_Company[/url] [url]http://en.wikipedia.org/wiki/Mississippi_Company#The_Mississippi_Bubble[/url] [url]http://en.wikipedia.org/wiki/Railway_Mania[/url] [url]http://en.wikipedia.org/wiki/Encilhamento[/url] [url]http://en.wikipedia.org/wiki/Florida_land_boom_of_the_1920s[/url] [url]http://en.wikipedia.org/wiki/Great_Depression[/url] [url]http://en.wikipedia.org/wiki/Panic_of_1893[/url] classic example of overproduction and speculation: overproduction of crops and silver
Welp, I'm out of this at this point. My moral positions are no longer needed, we have the economic professors here.
[QUOTE='[Seed Eater];35535314']Welp, I'm out of this at this point. My moral positions are no longer needed, we have the economic professors here.[/QUOTE] I would hardly consider myself a professor .__.
[QUOTE=prooboo;35535338]I would hardly consider myself a professor .__.[/QUOTE] Compared to me. I know a fair bit compared to the average joe, but I've always lacked in economics. Hence my leaning towards political science. I can argue politics quite a fair bit, but the economic aspects of leftism is not my strong suite. I know very vague basics, which is a real weakness.
[QUOTE='[Seed Eater];35535314']Welp, I'm out of this at this point. My moral positions are no longer needed, we have the economic professors here.[/QUOTE] You're being incredibly generous :v: ... for me, at least. [editline]12th April 2012[/editline] [QUOTE=prooboo;35535312]Counternote: we live in a capitalist mode of production, so using evidence from the past century and a half is completely okay. Even then, The US was largely Laissez-faire for the 20's and the 19th century examples of economic bubbles in capitalism: [url]http://en.wikipedia.org/wiki/Tulip_mania[/url] [url]http://en.wikipedia.org/wiki/South_Sea_Company[/url] [url]http://en.wikipedia.org/wiki/Mississippi_Company#The_Mississippi_Bubble[/url] [url]http://en.wikipedia.org/wiki/Railway_Mania[/url] [url]http://en.wikipedia.org/wiki/Encilhamento[/url] [url]http://en.wikipedia.org/wiki/Florida_land_boom_of_the_1920s[/url] [url]http://en.wikipedia.org/wiki/Great_Depression[/url] [url]http://en.wikipedia.org/wiki/Panic_of_1893[/url] classic example of overproduction and speculation: overproduction of crops and silver[/QUOTE] We do not live in a free market system. The 1920s is and the great depression are not citable for the faults of capitalism. Those were financial failures, and we have a centralized finance and banking system; it was the federal reserve that created those bubbles. The Panic of 1893 isn't a valid example because it was the result of the tampering of monetary policy and silver coinage. Railway Mania was encouraged by the Bank of England artificially cutting interest rates and incentivizing risky investment. I could go on and on, but the point is that these bubbles were the result of poor finance and money, not for reasons inherent to a free market economy.
[QUOTE=Derubermensch;35542568] We do not live in a free market system. The 1920s is and the great depression are not citable for the faults of capitalism. Those were financial failures, and we have a centralized finance and banking system; it was the federal reserve that created those bubbles. The Panic of 1893 isn't a valid example because it was the result of the tampering of monetary policy and silver coinage. Railway Mania was encouraged by the Bank of England artificially cutting interest rates and incentivizing risky investment. I could go on and on, but the point is that these bubbles were the result of poor finance and money, not for reasons inherent to a free market economy.[/QUOTE] Although there are many factors which may cause bubbles, the fact remains that individual investors made bad decisions and bought into them. Surely, if there are terrible financial products then investors should realise that they are risky and not buy into them? So long as individuals are capable of making poor decisions then bubbles, crashes and meltdowns are still going to happen. People often cite 'human nature' as a reason why Communism fails (which is false anyway) but I could also cite 'human nature' as a reason why Capitalism fails. Completely 'free' markets assume that individuals are isolated entities and that their terrible decisions do not affect everyone else. A factory owner may decide to invest in a risky business venture, lose and go bankrupt. That is fine because it is his decision but his poor judgement then affects the lives of the workers at his factory. A bank CEO may riskily invest depositors money, lose and cause the economy to near-collapse. In a nut-shell: financial bubbles/crashes [U]are[/U] inherent to a free market economy because of the role individuals play in the markets and the amount of power and influence they have. Poor individual decisions have the potential to affect many more lives than their own. If an individual can set up a pyramid scheme for his benefit then he will do so etc. (This is just one approach to explaining bubbles; there are many others. I just decided to take a more theoretical approach and it is not particularly detailed since I want people to read it and not just skip over it.) [QUOTE=Derubermensch;35535208]People wouldn't partake in deals and practices bound to fail out of self interest. The reason we get bubbles is because of government incentives that [U]encourage[/U] people to make self-destructive decisions.[/QUOTE] You perhaps unwittingly provided evidence for my argument. Governments, advertising agencies and businesses may 'encourage' people to make risky decisions but the choice whether to invest rests solely on the individual. Individuals are not infallible entities and thus they will make economic decisions which are not in their interest. Advertising cannot work in a free market nor can information failure be cured without it (thus a paradox).
[QUOTE=Mythman;35565247]Although there are many factors which may cause bubbles, the fact remains that individual investors made bad decisions and bought into them. Surely, if there are terrible financial products then investors should realise that they are risky and not buy into them? So long as individuals are capable of making poor decisions then bubbles, crashes and meltdowns are still going to happen. People often cite 'human nature' as a reason why Communism fails (which is false anyway) but I could also cite 'human nature' as a reason why Capitalism fails. Completely 'free' markets assume that individuals are isolated entities and that their terrible decisions do not affect everyone else. A factory owner may decide to invest in a risky business venture, lose and go bankrupt. That is fine because it is his decision but his poor judgement then affects the lives of the workers at his factory. A bank CEO may riskily invest depositors money, lose and cause the economy to near-collapse. In a nut-shell: financial bubbles/crashes [U]are[/U] inherent to a free market economy because of the role individuals play in the markets and the amount of power and influence they have. Poor individual decisions have the potential to affect many more lives than their own. If an individual can set up a pyramid scheme for his benefit then he will do so etc. (This is just one approach to explaining bubbles; there are many others. I just decided to take a more theoretical approach and it is not particularly detailed since I want people to read it and not just skip over it.) You perhaps unwittingly provided evidence for my argument. Governments, advertising agencies and businesses may 'encourage' people to make risky decisions but the choice whether to invest rests solely on the individual. Individuals are not infallible entities and thus they will make economic decisions which are not in their interest. Advertising cannot work in a free market nor can information failure be cured without it (thus a paradox).[/QUOTE] What you are citing is that people have free will. But the government's, or rather, the federal reserve's, coercive monopoly of finance caused people to make these self-destructive decisions. But you are discounting the fact that a central finance and banking system has no place in a free market system. If we had decentralized, privatized banking and interest rates were allowed to shift to their market equilibrium level (which is the free market aspect of banking) then we wouldn't have had these bubbles because they would have been impossible to make. The kind of power the FED has would be alien to banks in free-market finance.
Long time since I checked this thread. Great post Prooboo, I'll quote you and your fantastic post in the op
Marxism is the way to go for Socialist societies. People are just too greedy with power to understand that the people need loving too and aren't drones to society.
[QUOTE=MShinigaki;35718273]Marxism is the way to go for Socialist societies. People are just too greedy with power to understand that the people need loving too and aren't drones to society.[/QUOTE] But...Marxism has little to do with love and such. It's all scientific. Many Marxists were very utilitarian and cared very little for abstract concepts, like the sanctity of human life or love or whatever.
Who said marxism has little to do with love, surely you have not heard the stories of lustful east german women? :v:
Sorry, you need to Log In to post a reply to this thread.