Two Myths about Capitalism

The power a weathy man holds is direct. The power a less wealthy person holds is indirect in the sense that if his wants are constantly ignored by some, eventually someone else will take notice and offer a better product/service. The latter kind of power is not something anyone can sense or feel comfortable about when a more direct power is visible around.

Perhaps a very good reason why you will never see governments disappear. While the threat of competition is good for the consumer, it is not good for the currently wealthy. So if a government doesn’t exist, one will be created by the wealthy (they can afford to pay for it) to ensure competition doesn’t come up i.e. kill free market. The way to prevent it would be for the rest to pay to set up a competing government to prevent the one owned by the wealthy from being successful. So you will need a government to protect the free market unless somehow killing the free market for personal benefit becomes an unthinkable idea.

I don’t see the difference in principle. A wealthy person has more money, but money is only a mean, rather than an end. Both rich and poor need somebody to provide them with what they actually want in exchange for the money. Poor people are much more numerous than rich people, and are thus much more likely to find somebody to satisfy their needs.

Perhaps. However, raw power is not the only determining factor. Ideology matters. A lot. So while I recognize that getting rid of government is an uphill battle, this battle is not an impossible one to win. The battleground is neither the physical world (as violent so-called anarchists believe) nor the ballot box (as the various Libertarian Parties seem to think) but rather people’s hearts and minds. It is a battle of ideas. If the idea of liberty (in the form I am advocating) takes root, the wealthy will have as little ability to resist the forces calling for abolishing their special rights as did the French aristocracy of the 18th century.

The difference is not in principle, but in practice.

It is much easier to make a product or provide a service if cost were not an issue than if it were. So a rich man’s needs get met much sooner than a not-so-rich man’s. More importantly it takes economies of scale to meet the not-so-rich man’s needs, meaning it takes rich people (who are few) to meet poor man’s needs while anyone rich or poor (who are many) can meet the rich man’s needs. Not that it is wrong, but that the power gap is real and not a myth.

Individual liberty of the kind you are advocating is an idea, not an ideology, Hence it may have different levels of intellectual acceptance at different times, but will not take root because it has no inherent survival value by itself. It needs another vehicle to survive. The vehicle you choose is that it will lead to higher level of prosperity for all in the long run. Or you are trying to convince the listener that it will lead to a higher level of prosperity for him. When a higher level of prosperity for all seems possible without it even in the short run or when the individual concerned sees a possibility for a higher level of prosperity without it, it stops being the motor fuel for the vehicle.

Try convincing someone that the idea itself is worth it regardless of consequences, higher or lower prosperity for one or all short or long term, and see how many will be convinced. That alone will tell you if it can take root.

To address the first half of this first, due to things like (a) imperfect mobility and (b) natural inequality between humans and imperfect information, free-market Capitalism necessarily tends towards some businesses becoming larger than others, tending towards monopoly:

(a) People can’t up and leave any situation they are in at will, nor would they want to if they could. Most people settle in certain places for significant periods of time, influenced by the proximity of family and friends, and developing connections with people and their increasingly familiar surroundings. Most people carry significant material baggage with them, which takes a great deal of effort to move from place to place. Most people are only willing to commute a certain distance, giving them a limited area to find work in. All factors like this provide employers with significant scope to push employees beyond their comfort zone before any “voluntary” agreements between employer and employee can no longer be endured - even in the most free market economy.

(b) The most successful business does not become the most successful business simply because it provides the best product. Much of what constitutes the “best” product is in the persuasion of the public that a product is indeed the “best” - “best” is a value judgment based on what information is available. A great deal of what constitutes the information available is in marketing and a great deal of subliminal influence goes into the most effective marketing. Consumers are more often than not merely passively interested in the products available. This is in part because there is so much choice that the consumer is overwhelmed and is no longer willing to be fully in charge of what they choose.

This gives a lot of scope for employers to encourage the “appearance” of a need for a product, even when there is actually very little need or desire initially. Ironically, there is a great deal of security demanded by employers in a free market when ensuring an adequate and predictable market.

Further, it is primarily on business COSTS that businesses compete, not revenues from simply having the best products. An example of this is the sale of branded products for different prices - clearly they are all made by the same company in the same way each time. Further bargaining power to drive down costs comes about when businesses can make larger bulk orders - the gap between larger businesses and smaller ones is increased due to economies of scale. The larger and more powerful businesses likewise have more bargaining power with the threat of withdrawing their orders from suppliers. This can drive costs down even further for already successful businesses much more than it can smaller businesses.

If there was no option to compete on cost and to aggressively influence consumers through advertising campaigns, and to benefit from economies from scale, producing the best products would be much more closely correlated with the best businesses.
The free market encourages all the above things, all detracting from the best product possible being available to consumers, even by the most successful companies.

Let it NOT be mistaken that I am implying that free market tends toward the complete detriment of the consumer.
The only thing in the consumer’s favour that prevents this is the limited power they have in a free market - which leads me to the 2nd “myth”.

It is one thing to say that wealthy people and ordinary people both have power in a free market, and another entirely to claim that they have equal power.

Can an ordinary person buy the best products, no matter how expensive? No.
Can a wealthy person buy the best products as well as the worst? Yes.

Clearly purchasing power is in favour of the wealthy people. Of course wealthy people would have more power than ordinary people.
Do ordinary people have NO power? Of course not.

It is in the employer’s primary interest to increase their market size because this leads to more demand and revenue from greater numbers of people. This is where ordinary people come in useful.
In pursuing his own interests, the employer provides things for ordinary people so that he gets something in return. However, the producer of the product in a free market would not sell anything if they did not get more in return - otherwise they would simply be producing for the love of production, needing a certain amount in return to be able to continue production. The financial incentive that the system is based on requires that money flows steadily back to businesses so that they may grow at the socially accepted rate that equates to “incentive to set up and maintain a business”.

This happens during a boom period, and when too much wealth has flowed back to businesses, consumer wealth decreases to a point where consumers can no longer spend as much, the rich withdraw their investment because they are no longer getting wealthier at their desired rate, and the economy busts.

This is inherently going to happen over and over and over again in a free market.
For every period of growth, the growth must be undone at every recession or depression.

The hope is that in the meantime, more valuable products would have been developed and knowledge of them is not lost. As long as this is the case, the economy can restart once the recession or depression has become so devastating that it cannot get any worse, and we can all start again from a point of higher standard of living.

This would be a lot clearer and extreme without any government “interference”.

Let it not be forgotten that governments resort to tactics like running the printing presses to create the illusion of more money… to continue the imaginary appearance of growth. This is only needed when an economy requires this illusion.

Employees maintaining a similar or increasing standard of living while money flows away from them is a symptom of products becoming cheaper as new, more valuable ones replace older versions - not of wealth flowing towards employees. This is why wealth flowing away from employees isn’t so clear. Inflation masks this process even better.

The illusion of more money makes it look like wages can be increased, but this is later cancelled out by businesses INFLATING prices so that the previous proportion of employer/employee wealth is restored, and the flow from employee to employer continues.
The illusion of more money makes it look like consumers are maintaining their purchasing power or that this power is increasing. This keeps investors under the illusion that they are continuing to profit from their investments at a more steady rate.

However, such action only prolongs the boom periods and lessens the blows of busts when companies are bailed out.
Booms and busts are inevitable in a free market because what is being seen as “growth” is an illusion. The only actual growth is in knowledge of new technologies and products.

(WHY DO WE NEED THESE BOOMS AND BUSTS FOR NEW TECHNOLOGIES AND PRODUCTS TO BE CREATED?!!!)

The greater power is in the hands of the wealthy who the wealth flows towards during boom periods, and who have exclusive access to be most advanced technologies and products. The wealthy investors are in charge of when to withdraw their investments to get them through a bust period.
The lesser power is in the hands of the ordinary employees who wealth flows away from, and who are left with nothing to see them through each bust period - all the while having no access to anything but out of date technologies and poorer quality products.

Basic game theory argues against the former assertion (see: coordination games). Furthermore, while it is true that no true laissez-faire system has ever existed, it is also worth noting that governments which favor a laissez-faire approach do see a greater development of monopolies than those which do not. Theoretically speaking, I see no reason why this trend would alter itself after a certain threshold was crossed.

As for the second myth, there are two avenues one could pursue in their objection. The first is about the degree of power any given individual has within the system (see: the argument against voting thread). That argument holds some weight, though a more potent objection lies in modern media culture and the consumer culture. Demand doesn’t stand on its own as an independent entity but rather it is created. While all classes are subject to this process, access to the media outlets used to create this demand is restricted to the wealthier segments.

In my view, there is almost always an enormous gap between an ideal [of anything] and the world we actually live in.

And capitalism is always viewed from conflicting moral and political perspectives. What some see as its most remarkable achievement others will see as its most deleterious failure.

Look at the dreadful consequences of the business cycle and the manner in which some capitalists treat employees as interchangable [and clearly expendable] spokes on a wheel.

One need but Google the Industrial Revolution to note why unions and communism became so popular. Capitalism is notorious for creating the very conditions that preciptate the politcial and economic interests that oppose it.

As with capitalism itself, “the state” or “the government” is always in the mind of the beholder. It’s size is good or bad depending on how you fit it into your political [or ideological] lexicon; or on what you get out of it.

And, again, out in the real world, it is never reducible down to only one thing or the other.

The concern I always have is the manner in which capitalism and the government are just two ways of saying the same thing. At least here in the US of A.

Hence my post above.

It’s possible to say that a large group of people each with a miniscule amount of power collectively have more power than a small group of wealthy people each people with a great deal of power. However, it is much easier for the small group to organize and use their power. A handful of people can quickly agree and act. Trying too get a million people to agree and act is considerably more difficult and time consuming. It is easier for the wealthy to wield power.

I wonder how the idea of ‘no government’ would work in the case of essential needs such as water, electricity and heating fuel. What is to prevent a company from doubling the price of heating fuel during the winter and giving the consumer a choice of pay or freeze? Exorbitant prices for water? Why not? It’s not easy for consumer to switch to another company, even assuming that there is another company able to supply your needs. Maybe the company already has a monopoly in the area. The problem is exasperated when private companies own everything, including the water and gas pipes going to your house.

That’s a legitimate question. In a world with government, this is precisely why rich people do wield more power than the poor. Without government, however, all transactions are economic. The economic interests of poor people are effectively represented by the companies that cater to them. As I indicated in the OP, the largest, best financed and, presumably, most powerful corporations in the world cater to poor and middle class people, rather than specifically to the rich.

In word, the answer is competition. You would always have multiple providers (or, at least, multiple potential providers) of essential services. Turn your question around to food, which, in modern Capitalist societies is largely provided by the private sector. What’s to stop the one supermarket in a small town from raising the price of bread?
For essential services which are difficult to switch, standard practice among consumers would be to insist on long-term supply contracts. Consider rent, for example. It is expensive and difficult for a company to have to change offices. What’s to stop the landlord from suddenly raising the rent? The answer, of course, is that companies signing a lease agreement will typically insist on provisions that fix the rent for a relatively long period, often years, or limit its growth.
As for private companies “owning everything”, that is a manifestation of the second myth mentioned in the OP. In practice, it is impossible for a private company (or a cartel of private companies) to use their monopoly power against consumers. Some have tried. Historically, none ever succeeded.

Things are different, of course, when it comes to government, the true monopolist in society. There is nothing to stop government from effectively raising its prices (aka taxes) at will, and history is rife with examples of governments using their monopoly powers against their “consumers” (aka citizens).

The business cycle is a consequence of government intervention in the economy, most importantly in the setting interest rates and the money supply. Even mainstream economists agree that the Fed’s low rate policy in the early years of the previous decade played a critical role in fanning the housing bubble. Other government policies (e.g. creating moral hazard by rescuing financial institutions) are also involved. There is absolutely no evidence that pure free markets involve business cycles.

As for the treatment of employees, employers in a free society invariably improve the lives of their employees, at least in the eyes of those employees. I have recently visited Vietnam and had a chance to ask people about their attitude towards shoe factories, often decried in the west as “sweat shops”. Locally, people are eager to have those factories open, and seek employment in them because the terms of employment are better than any alternative open to them.

An employer who treated his employees in a way that, overall, represented a package that was worse than alternatives available to them would quickly run out of employees.

The industrial revolution helped lift millions of people from the horrible life of subsistence farming to a life that was much better, giving them stable income and allowing them to afford what was previously considered luxuries. Dickensian myths notwithstanding, ask yourself why people chose to work in factories? Why didn’t they stay in the farms in which their parents slaved all their lives?

Logically, there can only be two answers, neither one of which can condemn Capitalism. Either working in a factory represented an improvement (most likely answer in my opinion), or they were forcibly evicted from their land. In the former case, Capitalism helped improve their lives. In the latter, the blame is with government, the only entity that has the power to evict people from their land.

I agree that historical analysis is often complicated by the interplay between government and private forces. Still, being complicated doesn’t mean such analysis is impossible. Consider different societies with different degrees of government involvement. Other things being equal, the less government, the more prosperity. Or consider different sectors of the economy. The more government involvement (health, education), the worse the performance. Contrast those with food supply and high-tech.

As for the first paragraph, it is, of course, correct. The perspective I am defending, specifically, sees government as a pure evil, without ANY redeeming features whatsoever.

They are always intertwined, but not in uniform amounts. Even if abolishing government is currently an unrealistic goal, reducing its size and involvement (or at least preventing its growth) is not.

Theories, including mathematical theories, can only be applied to the real world with caution. Game theoretical considerations, for example, can never take into account the complications of human innovation and creativity, the entrepreneurial motivation and force of free individuals, all of which are critical for the understanding of the real world.

I challenge your assertion that laissez-faire results in greater monopolies. In fact, government intervention in the economy is often, if not invariably, used to decrease competition. In many cases, government asserts itself as a monopoly.
Hence lack of competition in public transportation, road building, and police services, and very limited competition in education. In other cases, government regulations restrict entry (explicitly, as in taxi services, or implicitly, as in banking).

As I noted in the OP, even during the peak of laissez-faire Capitalism in 19th century America, before the Sherman anti-trust act, there are NO examples of private monopolies acting to the detriment of consumers. None. What good are your theories if they are contradicted by actual experience?

It is false to associate large corporations with “wealthy segments”, as much of their ownership is, ultimately, in the hands of the middle classes (usually through pension funds).

More importantly, it is wrong to suggest that “demand is created”. At best, the media can help channel demand to one company rather than another, but not to “create” demand.

Consider what it is that people end up buying. Most products (by amount spent) are useful items for which demand requires no explanation. People want good houses, means of transportation, clothes, food and entertainment.

As for “luxury” items, I suggest comparing people’s spending patterns to those which prevailed before mass media communication. In ancient and pre-modern times, people, to the extent they could afford to, still desired luxuries. Remember the story of the Indians who sold Manhattan for a few coloured beads? Set aside its historical accuracy. Were those Indians subject to mass media campaigns to “create” demand for coloured beads? Of course not.

Why did primitive cultures go to so much trouble to obtain luxuries? Because wanting them is a natural human instinct. In modern societies, corporations are competing in satisfying that need, rather than in creating it.

I am not sure I understand the difference. I advocate a complete ideology based in several ideas, the value of individual freedom being one, but not the only one.

You seem to claim that people can only be swayed by selfish, individual motivation. This is patently false. Consider the millions of people that willingly sacrificed their lives, throughout history, for a variety of motives. By definition, they were working for an ideal beyond their own personal lives.

However, with the exception of a narrow class of pure exploiters who benefit directly from government (political and business elites), I do believe that the benefit of reducing government intervention will be both short-term and universal. Consider how quickly scaling down communist regimes resulted in increased prosperity for virtually all members of society.

The elites I mentioned above, however, control society. They obviously control the power centres such as the army and the police. Much more importantly, however, they control the agenda-setting and ideology producing sections of society, including academia, education and the media. That’s why the battle is an up-hill one.

Do you honestly believe the American Revolution was the result of people being persuaded that independence from Great Britain will result in short-term prosperity? Or was it motivated by the idea (or ideology) of freedom and independence?

You mention several factors tending to limit competition (e.g. geographical constraints) or to favour large actors (e.g. economies of scale). You also address the limitations of knowledge by the consumer in selecting the best products.

  1. Geographical limitations do indeed place practical constraints on competition. Monopolies can be local even when they are not global. To take a simple example, I live near a small town with only one supermarket. I could drive a few more miles to get bread, but that would be expensive and inconvenient. The supermarket, knowing that, could raise prices above those of the competition.

In practice, they don’t. Why is that? I think the most important reason is that competition is for the marginal customer. Consider again the price of bread. Neither I nor most people frequenting the supermarket are very sensitive to the price of bread, as it makes a small fraction of our overall food budget. The price of bread is not legally controlled either. Why doesn’t the supermarket raise the price of bread by 10% over whatever they currently charge?

The answer is that while most consumer would continue to buy bread at a 10% price hike, the marginal consumers who would be deterred by the price change will take their business elsewhere. The current price is selected precisely in a way that, in the eyes of the supermarket management, would maximize their profits.

The same hold for factory employment. Yes, most employees would not leave if their conditions were to become worse. But the marginal ones would. Even if employee treatment can be more individualised, employers still have a reputation to consider. Having reputation of ill-treating your employees is not good for business.

In the longer-term, additional mechanisms come into play in the free market. For example, employees will quickly learn to demand contractually-guaranteed terms before agreeing to sign up for longer-term employment. Once burned once, people tend to learn their lessons. Having being unfairly dismissed by one employer may prompt employees to demand arbitration prior to dismissal. Employers always compete for employees (for otherwise why is anybody paid more than minimum wage?). If concern about unfair dismissal is indeed important, employers would find it beneficial to offer it as part of the terms of employment.

  1. The “Best” product and limited information.
    As a student of Austrian Economics, I am very sympathetic to concerns of limited information. Decisions are always made based on limited information. ALWAYS. Now let’s apply this insight into examining the free market and its alternatives. It is correct that consumers are basing their purchasing decisions on limited information. It is also true that corporations will try to take advantage of that fact. However, what is the alternative? Typically, the alternative is some kind of government regulation. However, government regulators are also necessarily going to base their decisions on limited information. Moreover, centrally-made decisions are always based on far more limited information than that made by dispersed individuals.
    Government regulators cannot be aware of local, not to mention personal considerations. They cannot know what my personal risk-reward preferences are. Moreover, government regulators are never going to be as motivated as I am to try to obtain as much information as is reasonably required to make purchasing decisions.

Economies of scale apply to the acquisition of certain kinds of information (e.g. safety testing). But the free market is perfectly capable of providing information-gathering services. Consumer Reports is one well-known example, and Amazon and Tripadvisor provide more high-tech examples.

Ultimately, the question regarding what’s best for people ought to be decided by the people themselves. I object to being treated as a child, as do most adults. I want to be able to make my own decisions, rather than having my options limited. I think that sentiment is shared by most people. After all, even in a free society, nothing stops you from relying on figures of authority before making certain decisions (see the Amish).

As for businesses “creating” demand, I addressed that myth above. While you may not understand why people may want to “waste” their money on certain purchases (and, admittedly, neither to I :slight_smile:), a quick review of history easily shows that seemingly-irrational consumption patterns are not an artifact of modren society, free markets or mass media. They are part of human nature.

  1. Economies of Scale
    You correctly point out that economies of scale often favour larger businesses. Yet not all industries are dominated by a few large actors. Walk into any shopping mall and you will find a handfull of large department stores, but also a large number of smaller stores, both part of national chains and one-off ones. Why is that? Why haven’t department stores and national chains completely out-competed owners of individual stores?

The answer, I think, is that economies of scale are counteracted by “diseconomies of scale”. Large businesses suffer from the same problems that governments do. They lack the flexibility to react to local conditions. They lose the benefit of the price mechanism to efficiently allocate internal resources. They have entrenched “elites” (management) whose personal interests may not be aligned with those of the business as a whole. They may not properly incentivised internal innovation. They tend towards a sense of complacency. They certainly hold no monopoly on innovation within their area.

For all those reasons (and others), even large, previously-successful and seemingly-entrenched businesses routinely decline, fail and even go out of business. Who would have thought, in the '70s, that an upstart like Microsoft could overtake IBM? In the '90s that Google could overtake Microsoft? In each case, the incumbent enjoyed numerous advantages, including reputation, economies of scale, large R&D departments, and a solid capital base.

As many people noticed, I wasn’t very careful in my OP to make the distinction between the power of individuals (where clearly the more money you have, the more options at your disposal) and the aggregate power of groups of individuals. My point was that the aggregate needs of poor and middle class people tend to trump those of rich people. There is much more money to be made catering to the masses than to narrow elites.

Truly free societies represent another facet to the power question. Without the power of eminent domain (so often abused for the benefit of the politically powerful) and regulation, there is very little a wealthy person or corporation can do to an individual, even one of modest means. In an extreme example, a poor subsistence farmer can, in theory, continue to grow wheat in the middle of a large city, even when his land stands in the way of a large and lucrative development project. The people behind the project may be the wealthiest in the land, yet all their wealth cannot legitimately force the farmer off his land.

It is primarily in that sense that money doesn’t buy you power in a free society. Contrast that with our government-dominated world. With enough money to buy influence, the farmer’s land would be confiscated in no time.

I don’t accept your analysis of boom and bust cycles as a free-market phenomenon. As I explained elsewhere, those are a direct consequence of various forms of government intervention. In a free market, a business would be expected to have a certain “return on equity”, at a level asymptotically equal to the risk-free rate (itself determined by the market based on people’s time preferences) plus some risk premium. Nothing requires businesses to grow. Many mom-and-pop stores retained their size for generations.

Where you see a push for growth is in the capital markets. Public corporations compete for investor capital. Investors require a competitive rate of return for their investment. Nothing in the free market, however, requires that that rate of return be unsustainable.

As I mentioned above, there is nothing inherent about the business cycle. It is always the result of government manipulation of interest rates and the money supply, together with moral hazard that distort the natural balance between greed and fear, profit and loss, which would act to dampen “unbridled entusiasm” in a truly free market.

Historically, the worse recession in history (the Great Depression) came precisely when the US government (under both Hoover and Roosevelt decided to intervene in order to “help” the economy. The financial crisis of 1920 was as severe and deep as that of 1929. Yet it was over within a year, precisely because government largely did nothing. It was Hoover and Roosevelt’s disastrous intervention that created, deepened and prolonged the crisis to created the Great Depression.

The failed attempts of the Japanese government to pull its country out the a “lost decade” of the '90s is another example.

You are pointing in the right direction. But your interpretation puzzles me. Government runs the printing presses because the politically-powerful elites (both within government and in the banking sectors) greatly profit from the practice, even though it is to the detriment of the economy as a whole. Would you join me in calling for removing government forces from involvement in money production?

I am confused. What is “wealth” if not the ability to maintain a higher standard of living? If employees are able, as you correctly point out, to increase their standard of living, isn’t their wealth, by definition, increasing?

You continue to correctly point out the evils of inflation (e.g. illusion of more money, cancelled by increased prices). However, you seem to suggest that the fault is with businesses (“INFLATING prices”). Businesses would always try to raise prices as much as they can, with or without increased supply of money. Inflated prices are the direct result of more money (ALWAYS produced by government) chasing the same supply of products.

Throughout your reply you correctly associated boom-and-bust cycles as well as the ills of inflation with increased supply of money. However, money supply is controlled by government. Free-market money supply is never unlimited.

Without increased money supply, there would be no pressure to blow up bubbles. Investors may desire growth, but their desires would be limited by the constraints of the real economy, rather than flamed by illusory low interest rates created by central banks.

We don’t! What we do need are free markets in which entrepreneurs would be able to create and innovate, the price mechanism would channel investment into the most desired and productive avenues, and consumers would be given the widest possible choice of products and services.

It is true that the wealthy typically have access to the most advanced technologies and products. In the modern world, however, that advantage is very short-lived. Cellular phones, once exclusively available to the rich, are now in the hands of subsistence farmers in the third world. The same is true about TV and satellite dishes.

As for investments, a large fraction of investable funds IS in the hands of the middle-class, primarily through pension and mutual funds.

Most importantly, it is a mistake to associate choice with power. As a wealthy person, I can eat in any restaurant I feel like. However, all my money cannot stop a person of more modest means from eating at McDonald’s. Only government has that kind of power. Money can be used to hijack government force for the service of the elites. That is done all the time. Without government, money’s power is much more limited.

An ideology necessarily means something larger than an individual towards achieving which an indvidual can voluntarily sacrifice his interests and life or even sacrifice the interests and lives of others. Yes, people sacrifice interests and lives for the sake of ideologies. Whether something qualifies as an ideology or not is dependent on whether the adherents are willing to give up anything for it. It is not an iedology if few professing it are willing to give up any of what they now have for it.

Yes, I know that is what you believe.

Communist regimes when they formed had the exact same effect. What does that prove?

Yes, elite control the state and society. That is actually a tautology since elite are exactly those that control the society and state. Your agenda is abolition of the society as something larger than any individual, not state. Only when society, as something larger than individuals, ceases to exist, individual liberty of the kind you advocate will be possible.

You must be kidding, right?

The American Revolution was not about freedom or independence. It was about power. Their demand “no taxation without representation” was to be represented in the English Parliament, not to govern themselves freely. Even that was an excuse. About the only tax that the Crown levied at the time of the revolt was tax on tea.

That after gaining power they claimed to have been motivated by ideals like liberty and antipathy to monarchy etc are testimonials to their dishonest and devious nature that continues till date. There is nothig more disgusting than slave-owners like George Washington and Thomas Jefferson waxing eloquent about “individual liberty”!

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Top 1% of households has 47% of the wealth [in america], 80% have 7% of the wealth, clearly the top 1% has the greater purchasing power. However you are right [ “…needs and desires of lower and middle class…” ] in that those corporations sell lots of products and hence need lots of people to sell them to. This is exactly my argument for redistribution of wealth, the more spending power that group has the healthier the economy.
What we are forgetting here is that the top 1% and 20% are they who do the major investing, almost every nation in the world is in massive debt and to whom ~ well to these extraordinarily rich people. Hence the centralising element [national debt and banking generally] creates a wealth far greater than the GDP’s of nations, and it is mostly harvested by that tiny minority. purchasing power!? they buy and own massive shares in the worlds businesses.

You will never get rid of that and achieve market anarchism! [if that is what you are aiming at] If you did take away centralisation and big govt then the unions would step in for the workers. Someone always grabs power.

What would stop successful companies from continuing to grow? E.g. where a supermarket buys up farms and suppliers, how can anything smaller compete with that? if they did what would stop them from buying said small business?

And for every narrative along this line there will be one that insist the government intervened in the economy precisely because the private sector was unable to avoid the crippling booms and busts.

Perhaps that’s because there has never been a historical era where crony capitalism did not largely rule the roost. Has there been in American history? What were the results?

Come on, if that were the case then, initially, during the Industrial Revolution, Marxism, socialism, unions, organized labor etc. would never have gotten a toehold. And in the modern era corporations rely on government safety nets to keep the political reprecussions regarding their more egregious policies ever at a low boil. And the corporate media is always there to steer the discussion in the direction of the lesser of two evils.

Yes, when the alternative is nothing at all, the sweat shops look mighty nice. But that doesn’t justify the brutally explotative policies. And the ruling class in places like Vietnam and China are a crony capitalist’s wet dream. American corporations drool over this kind of dictatorship over the proletariate.

Now, don’t get me wrong. I’m no Communist. I recognize that the capitalist political economy is the worst one out there—except for all the others. But the apologists for capitalism refuse to acknowledge just how brutal a world this can be when the “bottom line” is always the number one consideration.

Wasn’t it Jay Gould who once said, “I can hire half the working class to kill the other halve”? Many an employer will treat his or her employees with as much disregard as he or she can get away with. The Ayn Randroids love to portray their working class heros as the ones employed by magnates like Hank Reardon. But Atlas Shrugged was basically a caricature of a cartoon in my view.

And it’s not that capitalists are necessarily callous and uncaring sorts. It’s just the very nature of the political economy. Fierce competition requires each employer to pay as little as possible in wages and benefits. It’s the very nature of the beast to be exploitative.

iambiguous wrote:

One need but Google the Industrial Revolution to note why unions and communism became so popular. Capitalism is notorious for creating the very conditions that preciptate the politcial and economic interests that oppose it.

Again, I don’t deny there are two sides to this story. But I challenge anyone to investigate the conditions under which millions of working class men, women and children lived back then and then wonder why communism and organized labor burst onto the historical stage with a vengence in tandem.

Also, you ignore the psychological travails built into contraptions like Taylorism and the brutal alienation that is, in turn, built into production that is rationalized down to its most minute parts. It allows for extraordinary advances in production, of course, but it doesn’t lessen the mental costs born by those doing the production.

It is possible of course but we inevitably bump into Disraeli’s, “there are lies, damn lies and statistics.” No matter your political stake in arguments like these you can always come up with “facts” and “anecdotes” to “win” the argument.

Yes, but China may well be the future and here the government and the economy are often interchangable. It may come down to a contest between different renditions of crony and/or state capitalism. Laizze-faire capitalism? It is no where to be seen.

Again, bring out the statistics! America is the only industrial nation that does not deem health care to be a fundamental right of its citizens. And for every “horror story” you can pluck down from Canada, there are at least as many or more such calamities here in America.

Again, bring out the anecdotes! These “metaphyscal”, Objectivist arguments are so purely ideological it is simply not challenging to address them. Any number of untold millions of men, women and children have benefitted from government programs. And, as always, it is the “fit” that counts. And everyone sees this from differing historical, cultural and experential perspectives. To imagine government being reduced down to practically nothing is simply infantile in my view.

iambiguous wrote:

The concern I always have is the manner in which capitalism and the government are just two ways of saying the same thing. At least here in the US of A.

Abolishing the government is so close to la la land it is not even worth the time to consider; and reducing it is always neck and neck historically with expanding it. in my view, you need to put a leash on that intellectual leash you use to divide the world up into…patriots and pinheads?

And, like Glenn Beck, do you have an absolute opinion on God too?

Just bumped into this over at the Huff Post from the New York Times:

By ERIC LIPTON and NICOLA CLARK

[b]The king of Saudi Arabia wanted the United States to outfit his personal jet with the same high-tech devices as Air Force One. The president of Turkey wanted the Obama administration to let a Turkish astronaut sit in on a NASA space flight. And in Bangladesh, the prime minister pressed the State Department to re-establish landing rights at John F. Kennedy International Airport in New York.

Each of these government leaders had one thing in common: they were trying to decide whether to buy billions of dollars’ worth of commercial jets from Boeing or its European competitor, Airbus. And United States diplomats were acting like marketing agents, offering deals to heads of state and airline executives whose decisions could be influenced by price, performance and, as with all finicky customers with plenty to spend, perks. [/b]

Here is how capitalism actually works out in the world. It is crony down to the bone.

This is from wikileaks, of course. And the powers that be will do anything to shut it down because the leaks expose the huge gap between how the US portrays its foreign and economic policies and how they really unfold instead. You tell me: where does Washington end and Wall Street begin?

Historic events such as the American Revolution involve many people, each with their own understanding and motivation. The leaders of the revolution may have been motivated by the desire for power. They would never have been successful, however, without the support of a large fraction of ordinary Americans. It is the ideology those ordinary Americans believed in to which I was referring.

Being represented in the English Parliament wouldn’t have realistically resulted in a reduction in the (very minor) taxes to which the colonists were subjected. Rather, it was a manifestation of what they considered political freedom - the right to be represented.

Subsequently, the goal changed to become total independence. Again, I would argue that for most people, total independence represented an aspect of political freedom, rather than the expectation of an improved standard of living.

The masses never had, nor expected, to have power, except in the democratic sense. What the motivation of their leaders was is beside my point which is that people can and often have been motivated by ideologies that do not promise immediate material reward.

Will you have me believe that American people were motivated by a desire to “liberate Iraqis from oppression” or that they feared Saddam’s “WMD” were a theat to them as well? I lived in the US right upto the invasion of Iraq in 2003 and one thing I saw whenever Iraq was mentioned on the TV, irrespective of what channel it was, was that it had the second largest oil reserves in the world. The funny thing was George W Bush, after the invasion, practically joked aboout “WMD” by searching for them under his desk in the oval office and everyone got to see how the “liberators” were “welcomed with flowers”. Yet 59 million people (52%) chose to return him to power in November 2004. Are you saying the motivations of Americans a couple of centuries ago were drastically different from those living today? If so, what are the grounds for believng that?

From your own statement it appears the only things that can be redistributed are the shares in the world’s businesses since that is about the only thing the wealthy own and the rest don’t. What difference do you expect such a redistribution to make to the actual goods and services in the economy?

The proportions of difference can be changed, people in the third world paid a reasonable amount etc, I want to increase people ability to be self sufficient. More importantly the national debts could be cut greatly and only affect that top !%.

I do understand that the national debt creates growth, but in times like these it is strangling the more unstable economies. Every nation should have the same credit ratings, otherwise the poorer nations are paying back a greater proportion and hence are adding more to the global wealth pool, equally the richer nations borrow at a lower rate and hence pay less proportionally into that pool whilst also being able to borrow more. Essentially this makes rich nations richer and poor nations poorer, and the poor nations contribute to the wealth of the rich at a detriment to their own economies!

It is exactly the same for individuals, the whole process of capitalisation/centralisation of wealth is what creates such vast differences and instability in the world.