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Difference between revisions of "Capitalism"

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(→‎Capitalist societies in history: the fuck did that happen?)
(Dear Uncle Ho: Besides being a tremendous bore, you have a poor grasp on how capitalization works.)
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==Capitalist societies in history==
 
==Capitalist societies in history==
No societies have come terribly close to the dystopian dream of a 100% laissez-faire (or "leave us alone") fully capitalist societies. Moreover, no mainstream economists now view this as an admirable state of being, as most of them are smart enough to see it as an impossible pipe dream. For example, in a totally free market, there is nothing (Short of regulation) to keep the more powerful and wealthy from manipulating the economy, thereby making it un "free".  The question has instead become to what extent societies and markets should be regulated.  Two examples of this tension follow:
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No societies have come terribly close to the dystopian dream of a 100% laissez-faire (or "leave us alone") fully capitalist societies. Moreover, no mainstream economists now view this as an admirable state of being, as most of them are smart enough to see it as an impossible pipe dream. For example, in a totally free market, there is nothing (short of regulation) to keep the more powerful and wealthy from manipulating the economy, thereby making it un "free".  The question has instead become to what extent societies and markets should be regulated.  Two examples of this tension follow:
  
 
*'''United States of America''': The United States has long maintained that it has the freest economic system in the world.  This is a highly debatable claim, especially when made by those who point to the 1800s as some kind of golden age of capitalism. However, it is still the powerhouse of the world's economy (producing between 1/4 and 1/5 of the world's GDP), and many believe this is due to aggressive imperialism in which the US bullies, bombs and intimidates other nations into giving them what they want or the relative freedom to start a business, along with a risk-taking cultural attitude, depending on which side you're on.
 
*'''United States of America''': The United States has long maintained that it has the freest economic system in the world.  This is a highly debatable claim, especially when made by those who point to the 1800s as some kind of golden age of capitalism. However, it is still the powerhouse of the world's economy (producing between 1/4 and 1/5 of the world's GDP), and many believe this is due to aggressive imperialism in which the US bullies, bombs and intimidates other nations into giving them what they want or the relative freedom to start a business, along with a risk-taking cultural attitude, depending on which side you're on.

Revision as of 21:58, 6 July 2010

Capitalism is an economic system that is utilized in most countries of the world. Even in most countries where it is not accepted in theory, it is accepted in practice.

Most people agree that it has been more productive than any other economic system the world has tried, and requires comparatively small amounts of centralized oversight to keep it from running out of control. However, critics of capitalism object to the fact that the benefits of this often fall disproportionately on the rich, pointing to persistent and in some cases growing material and social divides in capitalist societies,[1] and believe that other economic systems are more just or can improve on capitalism.

In particular, capitalism is a far sight better than its predecessors, mercantilism and guilds, and has outlasted the idea of a command economy; it has also proven itself much more compatible with liberal social ideals than either of these systems. There is a body of academic literature that suggests that capitalism may in fact be a prerequisite for the growth of liberal social values, or at the very least something that can help with their spread. On the other hand, there have been plenty of countries that loosened economic restrictions while maintaining violations of political and civil rights; relaxation of economic restrictions does not necessarily imply increases in civil rights, etc.[2]

There is also a belief, patterned on the "democratic peace" theory of liberal international relations that no two globalized, capitalist countries can or will go to war with each other.[3] However, so far, the evidence for this is scant and actually leans against this. For example, the US and Serbia basically went to war in 1999 despite both having strong capitalist economies.

What exactly IS Capitalism?

The theory of free-market capitalism calls for the following rights:

  • The right for each person to have sacrosanct and untransferable ownership of his/her own mind and body;
  • The exclusive right to do whatever he/she wishes with his/her own property.

This entails, in theory, that one does not have to work except on terms acceptable to him/her. However, this also means that employers do not have to provide work except on terms acceptable to them, so people are not free to set the terms of their employment and often work on terms that are not completely to their satisfaction.

Unlike socialism, which has existed in various forms throughout history and always been characterized by some sort of theoretical basis, capitalism did not start out as a theory; it simply appeared on its own as governments became more liberal during the Enlightenment and did not exercise such strict control over how people traded and used their money. Property ownership in particular grew up very slowly, as people came to own land and other forms of capital rather than just leasing it from their lords.

Capitalist societies in history

No societies have come terribly close to the dystopian dream of a 100% laissez-faire (or "leave us alone") fully capitalist societies. Moreover, no mainstream economists now view this as an admirable state of being, as most of them are smart enough to see it as an impossible pipe dream. For example, in a totally free market, there is nothing (short of regulation) to keep the more powerful and wealthy from manipulating the economy, thereby making it un "free". The question has instead become to what extent societies and markets should be regulated. Two examples of this tension follow:

  • United States of America: The United States has long maintained that it has the freest economic system in the world. This is a highly debatable claim, especially when made by those who point to the 1800s as some kind of golden age of capitalism. However, it is still the powerhouse of the world's economy (producing between 1/4 and 1/5 of the world's GDP), and many believe this is due to aggressive imperialism in which the US bullies, bombs and intimidates other nations into giving them what they want or the relative freedom to start a business, along with a risk-taking cultural attitude, depending on which side you're on.
  • Singapore: This tiny city-state is rated one of economically freest countries in the world, illustrating that exploitation of natural resources is not the only source of wealth, and that free minds can also produce it. However, the state (also known as "Disneyland with the Death Penalty") has draconian social laws that run contrary to the theory of free-market capitalism, restraining, i.a., free trade in chewing gum, and Singapore is considered state-capitalist, which is but a hair away from that dreaded S word.

Capitalism and American politics

Conservatives and Republicans fancy themselves defenders of capitalism, or pretend they are for the sake of party unity. Though some right-wing measures are indeed pro-free-market (e.g., offshore drilling, reduced spending, reduction of income taxes, deregulation) the fact is that conservatives and Republicans have been just as hostile to capitalism as liberals and Democrats; the most obvious sign of this is the "pork-barrel" government grants and earmarks championed by most politicians on all parts of the political spectrum.

In a similar vein, one could point out that liberals and Democrats have been as friendly to the free-market as have conservatives and Republicans, as seen in the Clinton administration's many neoliberal reforms, such as welfare reform.

Capitalism and religion

Religious people involve themselves in politics all over the spectrum, usually claiming that God shares their political beliefs. For this reason, most of them are cranks and the powers-that-be appease them only as much as necessary to get their votes; hence, the Christian Right's failure to bring in a theocracy.

Although there is a strong tradition of religious involvement in left-wing politics (e.g., the early Christian church vs. the Roman Empire, Liberation theology), in the United States, most political figures who make religion an explicit part of their political identity are right-wingers and adhere to a form of Christianity that fits these beliefs.

This is ironic, because most of the particular policies that set the Religious Right apart from the secular right are contrary to the principles of free-market capitalism: laws like the Communications Decency Act put massive dampers on trade; laws upholding their take on sexual morality restrain people's right to do what they wish with their own property; to have laws mandating teacher-led prayers in public schools, one first must have public schools. Another layer of irony is added when you consider that Christ spoke out, in no uncertain terms, against what is considered today to be the core of Capitalist doctrine. It took an act of staggering cognitive dissonance for the right to twist him into being long-haired Reagan.

A truly free market, which is based on self-ownership as opposed to the doctrine that all people are the chattel property of God, is a Christian fundamentalist's worst dream; the only reason they sometimes pretend to defend it is because they can't spell "theocracy."

Criticisms of capitalism

An anti-capitalist illustration of how capitalism and the class system work.

Collectivist ideologies like Socialism, communism and fascism are all categorically opposed to free-market capitalism, for various reasons, such that it oppresses workers or spits in the face of tradition. Fascism, historically, kept in some facets of what it defined to be capitalism, such as formal private ownership (although vastly restricting what "ownership" means), while communism kept in some facets of what it defined to be capitalism, such as worker oppression.

Milder criticisms of unregulated capitalism are made by everyone except fanatical libertarians.

Unregulated capitalism is frequently mocked in cyberpunk and dystopian literature (the works of Neal Stephenson [4] and Max Barry[5], among many others, are particularly known for this).

This stems from the observation that capitalism, at its heart, is about each person working to benefit themselves as much as possible, and without regulations to ensure that this benefit does not come at the expense of others, capitalism changes into something altogether different. Even the strongest proponents of capitalism among economists allow for government intervention to address, if nothing else, these kinds of negative externalities.

Quotes about capitalism

Supportive

I could say to you that I have done more good for my fellow men than you can ever hope to accomplish --- but I will not say it, because I do not seek the good of others as a sanction for my right to exist.- Ayn Rand, extreme free-market devotee, Atlas Shrugged.

With all its flaws, capitalism remains the most productive economic engine we have yet invented. Like Churchill's line about democracy, it is the worst of all economic systems, except for all the others.- Fareed Zakaria, Newsweek, June 22, 2009.

Critical

Capitalism is the extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of all.- John Maynard Keynes, British aristocrat and economist.

Advocates of capitalism are very apt to appeal to the sacred principles of liberty, which are embodied in one maxim: The fortunate must not be restrained in the exercise of tyranny over the unfortunate.- Bertrand Russell

See also

Further reading

Footnotes

  1. On the other hand, some of the least inequal states are those that practice modified versions of capitalism, such as the Nordic countries.
  2. China is the number one example of this.
  3. Thomas Friedman referred to this as the "McDonald's Effect".
  4. Snow Crash and Diamond Age in particular
  5. Notably Jennifer Government and Syrup