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An assertion about Capitalism
#1
Assertion(s):

Capitalism leads to concentrated wealth and power, and destroys free markets.
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#2
From my admittedly limited knowledge on the subject, so do socialism and communism.

Perhaps any semi-stable economic framework leads to the same.
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#3
(06-15-2020, 10:58 PM)if cbeatty Wrote: Assertion(s):

Capitalism leads to concentrated wealth and power, and destroys free markets.

What’s the basis for this assertion?

For example, a theoretical mechanism, empirical evidence...

It would also be meaningful to have a frame of reference; that is, ‘capitalism leads to concentration of wealth’ as compared to what?  If for instance as Brunt suggests no system results in equal wealth for everyone, then particularizing the assertion to capitalism would be meaningless.

Also whether this concentration is inequitable ... for example if the concern is any disparity in wealth, including based on merit, or whether we’re particularly concerned with inequity or unwarranted wealth concentration.
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#4
(06-15-2020, 11:44 PM)brunt Wrote: From my admittedly limited knowledge on the subject, so do socialism and communism.

Perhaps any semi-stable economic framework leads to the same.

Good post!!!! Something to think about.
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#5
(06-16-2020, 05:38 AM)cbeatty Wrote:
(06-15-2020, 11:44 PM)brunt Wrote: From my admittedly limited knowledge on the subject, so do socialism and communism.

Perhaps any semi-stable economic framework leads to the same.

Good post!!!! Something to think about.

.
yes brunt is right,

seems perfectly normal/natural for anyone with more drive & smarts to get then have more and more,
and the less smart/energized/motivated to have less and less.
on a MACRO basis, stability BUILDS Wealth.


THAT SAID, Society doesn't put up with it for too long if too extreme -
so it gets tempered with voluntary charity, then mandatory charity
and systems that punish good (taxes on wealth creation) and reward the bad & unfortunate (welfare).


AND SOMETIMES evil envy (and/or the over zealous/greedy tenth of a percenters), makes the Babies have a tantrum and destroy everything for everyone (WWII, French Revolution, Cambodia, Russia - Pre history had their many examples too) and then we start all over again from the ashes building wealth, satisfying people's needs wants and desires.

till the cycle repeats
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#6
One of my big beefs with informal political debates is this -

Yes, it is easy to find fault with any system. These faults should be identified, considered, possible changes proposed, and improvements made. This is a positive thing - a natural and good thing.

But to point out a flaw, and say that an entire system should be scrapped due to this flaw. The clincher here is this - what is the alternative? Do similar flaws exist with the alternatives (as I proposed in response to the original post)? Do other flaws exist? Is the alternative, warts and all, better in actuality, rather than theory than the existing system? If it is, then make that comparison, not just put out soundbites of the flaws with the existing system.

There is an excellent video of Jordan Peterson which I unfortunately cannot find right now where he discusses how almost all changes to a working system make things worse. And radical changes generally make things radically worse.

This sort of thinking is widespread, as it is popular now to simply attack politicians personally. The correct stand is to point out how the alternative personalities, policies or organizations are better, not just the existing ones are flawed. Given that life is always about choices, the goal is always to take the best choice, not to simply discard all the ones that have any flaws.

Not that I think that the existing system is perfect - indeed, far from it. But it is not at all difficult to imagine changes to the existing system that would make things far worse. My problem is that a large number of popular ideas fall into this category, yet people love them.
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#7
(06-16-2020, 11:54 AM)DaveGillie Wrote:
(06-16-2020, 05:38 AM)cbeatty Wrote:
(06-15-2020, 11:44 PM)brunt Wrote: From my admittedly limited knowledge on the subject, so do socialism and communism.

Perhaps any semi-stable economic framework leads to the same.

Good post!!!! Something to think about.

.
yes brunt is right,

seems perfectly normal/natural for anyone with more drive & smarts to get then have more and more,
and the less smart/energized/motivated to have less and less.
on a MACRO basis, stability BUILDS Wealth.


THAT SAID, Society doesn't put up with it for too long if too extreme -
so it gets tempered with voluntary charity, then mandatory charity
and systems that punish good (taxes on wealth creation) and reward the bad & unfortunate (welfare).


AND SOMETIMES evil envy (and/or the over zealous/greedy tenth of a percenters), makes the Babies have a tantrum and destroy everything for everyone (WWII, French Revolution, Cambodia, Russia - Pre history had their many examples too) and then we start all over again from the ashes building wealth, satisfying people's needs wants and desires.

till the cycle repeats
 
There are some important questions about how it gets too extreme, though, and whether there's more than free market capitalism at work.  I would say there is.  It can probably be found in all sectors of government, but it's most obvious in the Federal Reserve.  The Fed has expressly undertaken a policy of holding interest rates near zero and inflating asset prices to create a "wealth effect".  Who owns most of the assets?  The already wealthy.  This policy therefore makes the rich richer at the expense of everyone else.  And artificially inflated asset prices not only make the richer richer, but also make it more difficult for those who don't already own assets to join the club.  And there's nothing libertarian or capitalistic about it.  The United States of America - Land of the Free - harbors the world's most powerful agency of central planning.

Corporatism is another factor not intrinsic to free market capitalism itself.  Corporations are creations of the state, and the state makes the rules.  Just for instance until 1982 corporations were generally prohibited from buying back their own stock on the grounds of market manipulation.  Most of those restrictions were lifted, arguably with justification at the time, since stock prices were historically depressed.  But while that's no longer the case, the restrictions remain lifted.  Corporate law also allows executive compensation in the form of stock options.  Combined with the ability for corporate managers to use the company funds to buy back stock, it creates a channel for corporate executives to help themselves to corporate capital.  Laws concerning shareholder control of corporate boards (say, compared to management) give shareholders - the actual owners of the capital - little recourse.  The result again is wealth concentration having no grounds in the principles of liberty or capital themselves.

We could go on.  The repeal of Glass-Steagall.  Bailouts ... for instance retroactively effectively turning mortgage agency securities into Treasuries, with the result that investors who took risk for higher yields had the risk removed after the fact.  Now introduced to corporate bonds.  The conclusion is that there exists a massive artificial concentration of wealth that can be traced not to free market capitalism, but to government.  The government, while posing as an equalizer on stage, has in fact been playing reverse Robin Hood behind the curtain.
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#8
(06-16-2020, 02:51 PM)brunt Wrote: One of my big beefs with informal political debates is this -

Yes, it is easy to find fault with any system. These faults should be identified, considered, possible changes proposed, and improvements made. This is a positive thing - a natural and good thing.

But to point out a flaw, and say that an entire system should be scrapped due to this flaw. The clincher here is this - what is the alternative? Do similar flaws exist with the alternatives (as I proposed in response to the original post)? Do other flaws exist? Is the alternative, warts and all, better in actuality, rather than theory than the existing system? If it is, then make that comparison, not just put out soundbites of the flaws with the existing system.

There is an excellent video of Jordan Peterson which I unfortunately cannot find right now where he discusses how almost all changes to a working system make things worse. And radical changes generally make things radically worse.

This sort of thinking is widespread, as it is popular now to simply attack politicians personally. The correct stand is to point out how the alternative personalities, policies or organizations are better, not just the existing ones are flawed. Given that life is always about choices, the goal is always to take the best choice, not to simply discard all the ones that have any flaws.

Not that I think that the existing system is perfect - indeed, far from it. But it is not at all difficult to imagine changes to the existing system that would make things far worse. My problem is that a large number of popular ideas fall into this category, yet people love them.

This is the cry of all radicals:

First point out that the existing system is imperfect (it is)

Second demand is to have it all torn down (you're seeing this now, in the streets)

Lastly the idea that if I was in charge it would be better. (the narcissism of the would-be dictator)  

It's a sleight of hand, where they get people to support them, but never mention any details of the alternative construct they're working toward.
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#9
All economic/social models (including organisms) contain the seeds of their own demise.



Order declines into disorder.

I think of the old fashion wind-up clock.  Over time it unwinds and stops working. Since most of us here fall into the category of "elderly" you probably had one 70 years ago.

[Image: s-l640.jpg]


[Image: 5e39c560f10d9.png]
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#10
(06-16-2020, 12:57 AM)Finster Wrote:
(06-15-2020, 10:58 PM)if cbeatty Wrote: Assertion(s):

Capitalism leads to concentrated wealth and power, and destroys free markets.

What’s the basis for this assertion?

For example, a theoretical mechanism, empirical evidence...

It would also be meaningful to have a frame of reference; that is, ‘capitalism leads to concentration of wealth’ as compared to what?  If for instance as Brunt suggests no system results in equal wealth for everyone, then particularizing the assertion to capitalism would be meaningless.

Also whether this concentration is inequitable ... for example if the concern is any disparity in wealth, including based on merit, or whether we’re particularly concerned with inequity or unwarranted wealth concentration.

My basis is that I assert it.

Are you aware of anywhere that Capitalism exists, or has existed that has not led to concentrated wealth and power and destruction of free markets?
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