Back to the needs of Capitalism

It seems I’ve been informally challenged to a debate. Robert from Making my Way is attempting to refute the points I raised in the needs of Capitalism.

There were various points raised which I will attempt to counter.

There can be no infinite goods.

Yes and no. While Robert took ‘infinite’ in the literal sense, I did not mean or require it that way. My first example was not of machines producing infinite food but quite enough food to feed everyone five times over, thus bringing the price of food to nearly zero.

Robert’s explanation of how such thing can never happen due to limited resources is simply skirting the issue. Not only that but we already have the capability to produce infinite goods (digital goods due to their nature are infinite, and yes, Copyrights are very much indeed a form of artificial scarcity) and enough food to feed the world population. The reason why we do not is exactly the problem I raised in misery and profit.

This is not strictly about self-generating goods. It is about having enough goods so that the price, due to supply, drops to (nearly) zero. Even when such thing would be overwhelmingly positive for the whole of humanity, as in the case of food or shelter, for capitalism this is negative.

The argument about trends is laughable. They do not apply to everything and people impoverished do not care about them. Honestly I don’t even know what you are replying with that.

Basic needs for free are not possible

Here I believe I need to clarify. Of course someone will have to do the work to produce the food people eat but I’m not talking about that. I’m talking about having enough increased production from each food maker that the amount of food produced by very few people (or none as in the case of the theoretical incredible food machines) is enough to feed everyone in the earth. As these few people do not need to be paid a lot for the staggering amount of food they would provide, the relevant costs of this for each person would be close to zero.

Now you have to realise that we’re talking theoretically here. It may very well be the case that we may never reach this level of production (although the rising production per worker in the modern day points otherwise) but we’re talking that if it were possible, it would not be even feasible under capitalism.

It’s unclear why you conflate work with misery, when work is simply a fact of life. You might as well say life is misery.

You misunderstand, I do not say that work is misery. I say that misery is what Capitalism uses to make people do the unwanted work.

Capitalism is the best thing we have because of how the world is

This is actually false. Capitalism is not here because it’s the best thing. We can already feed and shelter everyone in the world, even without infinite resources (as humans are not infinite either) but that would mean that there would have to be a redistribution of wealth. The rich would have to become less rich in order for poverty to go away.

Because of Greed, these people do not allow that to happen. Because of misery, the endless brutal cycle continues.

The fact that Capitalism is what is in force now does not make it exempt from criticism. Shutting your eyes does not make it’s problems go away. There are indeed systems that can work better than Capitalism and even if there weren’t, it should be our duty as humans to invent them.

Things that were not addressed

While Robert attempted to refute or skirt what was generally easy, the basic issues were not addressed.

Capitalism requires misery and Capitalism requires greed.

51 thoughts on “Back to the needs of Capitalism

  1. Profitable isn't limited to monetary terms, either. So you could say it's only not possible if no one cares to give food to those who are unable to afford it.

    If that were true, then would have already gotten rid of famine and easy-to-cure diseases in the third world. And yet we haven't, although it wouldn't be very difficult for a pharmaceutical company not to enforce their patents in the third world, or a genetic food company to give them fertile seeds.

  2. Regulation will not work anymore. When you leave the same people to gain the capital and create problem, in their positions, they will use a significant amount of their resources to avoid and then rip out any regulations that you put in place. This is the golden rule. He who has the gold, makes the rules.

    Regulation was attempted after the Great Depression and in the next 70 years it was systematically dismantiled by the same people whi it was supposed to regulate. This time they will do it even faster.

  3. But when we are talking about a technology that will produce enough food to feed everyone, the profit will be zero. It is not logical thus for a capitalist to ever invest in such a technology. Not unless he can use it as a monopoly or use artificial scarcity.

  4. Low prices is not negative for capitalism.

    Low prices in general no. Low prices in necessary goods are. If we were to have practically free food and shelter, then there would be nobody to do the really crappy jobs that require the threat of impoverishment. Once that is achieved, Capitalism has to base itself only on Consumerism and Greed to fill these positions and there's far fewer of these types of people than the ones misery can bring.

  5. …is that it's only not feasible if all free economic agents find a more profitable use of there money than producing food that costs almost nothing to produce.

    I've explained in the previous article why under capitalism zero-cost food is impossible. Why would any capitalist place money to research a technology that would reduce their profits. When they do, the use artificial scarcity to simple alleviate the obvious benefits.

  6. It would at least seem to me that copyright laws or intellectual property laws are imposed in the interest of Capitalism. It allows the creators to be rewarded, in a capitalistic sense, for their efforts.

  7. As for intellectual "property," it is not a part of capitalism, as it is a form of government imposed monopoly on ideas.

    It is a very classic part of Capitalism actually. The part that necessitates artificial scarcity like any other infinite resource that was achieved in-spite of their wishes,
    It's just not part of the Free Market (And yet, you have Libertarians defending it.)

  8. Exactly. The IP laws did not exist, and were not needed prior to capitalism, nor would they be necessary without it as they would have nothing to protect.

  9. I think we have some huge differences in our conceptions of capitalism. To avoid going back and forth without us getting anywhere, I think it might help to briefly summarize what "capitalism" is to each of us. To me, it is simply the free trade of goods and services. In my opinion, there can be modifications for things such as the environment and certain institutions that may be necessary to maintain a certain political structure (e.g. education in a democracy).

    "If we were to have practically free food and shelter, then there would be nobody to do the really crappy jobs that require the threat of impoverishment."
    This means that garbage collectors are going earn a lot more. People are going to have to pay them more money, as the garbage man's alternative to working is now better. Before he would starve, now he can pretty much sit around. When the price of making things goes down, yes we will probably see more consumption. In terms of economics, I'm not sure what's bad about that. I should think we'd see that in any economic system that has enough resources.

  10. Capitalism is the system in which private owners create products in order to accumulate wealth through the free market.

    Exactlty because the private owners gain wealth in an exponential rate (money breeds money), the also have the power (as money power) which they use to strike down any modifications made for things as the environment and anything that may hinder their accumulation of capital.

  11. This will only work for people who will be interested in further consumption or accumulation of wealth. There will be quite a large amount of people who will not with to work at McDonalds or as a armpit smeller for any reasonable amount of money. Many people would simply be uninterested in such jobs no matter the amount. With basically free food and shelter you lose a substancial amount of people who do not care to play the capitalist game anymore.

    PS: If you can please use blockquotes and a different comment for a different subject (check the comment policy)

  12. Yes IP laws raise the rewards for creators. Without IP laws, they would make less, but they would still make money if their work had any value. For example, a singer can perform his song at a concert in exchange for ticket sales. After that point, if he's a good singer, he can sell more tickets. Without IP, he just can't prevent other's from using the idea (which they now contain just as much as the first singer) and singing it themselves.
    I would be interested to hear of a possible example where IP is necessary for a creator to get any reward (excluding issues of fraud, which can be taken care of in courts, which are not perfect).

  13. "Capitalism is the system in which private owners create products in order to accumulate wealth through the free market. "
    According to your definition (simplified, of course) of capitalism, I'm not sure how capitalism requires IP, something not part of the free market. Capitalism does not require artificial scarcity.
    Logically, I don't think the issue of scarcity/non-scarcity makes sense. If there were no scarcity, then I don't think anyone would care about capitalism. They could have whatever they want. Artificial scarcity, on the other hand, is bad because it limits the use of existing resources.
    The only limitless resource I can think of is ideas. They are only limited by a person's ability to find them. IP creates artificial scarcity by preventing people from using ideas in their posession.

  14. So what you're saying is that no one (or at least not enough people) cares to give food to those who are unable to afford it. Sure. Is it your contention that they should be forced to work to get food to those people. Ultimately, I'd be curious as to your alternative to free market.

  15. Because the best way to create wealth in a capitalist system is to exploit bottlenecks. The smart people know that finding and especially maintaining a bottleneck will allow them to gain more. The Free Market serves to widen the bottlenecks, but not all private owners want to play with that, hence they either create artificial scarcity or, when they can't do it themselves, they lobby the government to do it for them

    Check here: http://barefootbum.blogspot.com/2008/05/critique-

  16. PS: Capitalism is about free markets only in theory. Practically, the owners of the capital stand to gain more when the market is not free. Which is why every corporation strives for monopoly.

  17. This argument about making bottlenecks sounds good, except I'm not sure how in a free market situation (i.e. no government-created IP) one can make bottlenecks that don't break.

  18. It would seem, then that there is no solution, and that capitalism is necessary without some non-market, non-government action, if those who benefit from capitalism have the power to influence the government to the extent you say they do.

  19. Will try and use block quotes, etc.
    Your logic leads me to believe that employers of armpit smellers won't invest in cheap food technology. Ok. But those who benefit from food sales will invest in cheaper ways to produce food, which in the absence of monopoly will drive prices down.

  20. I don't have to "say" it. You can see for yourself just by looking at the historical precedents. It has always been the corporate lobbies which influenced government the most. Who do you think pushed for stronger IP laws and an extension of copyrights every time Mickey Mouse was about to become public domain?

    Indeed, within Capitalism, there is no solution…

  21. So are you saying violent revolution and imposition of a system that prevents free transaction? I just saw that you mentioned socialism as a better alternative. What prevents those who benefit from socialism from using their power in the government to do whatever is best for them. What prevents them from returning to capitalism, perhaps?

    side note, is there anyway to have your site remember my computer, so I don't have to keep putting in my information?

  22. I think we can agree that no one will produce something that he won't be paid for. Without a numerical example to disprove it, I would say that competition would drive food prices to practically zero. There's no logical link between enough food for everyone and zero profit (i.e. a price of zero).

  23. "This is not strictly about self-generating goods. It is about having enough goods so that the price, due to supply, drops to (nearly) zero. Even when such thing would be overwhelmingly positive for the whole of humanity, as in the case of food or shelter, for capitalism this is negative."

    Low prices is not negative for capitalism. Negative for capitalism means preventing the flow of resources to their most productive spot (i.e. preventing economic agents from acting freely). High or low prices aren't good or bad for capitalism. They may be good or bad for certain businessmen (who aren't necessarily believers in capitalism). Extremely low food prices would mean resources would be freed up from food production to move to where it is better used by free economic agents. What this means, then, in relationship to…

    "It may very well be the case that we may never reach this level of production (although the rising production per worker in the modern day points otherwise) but we’re talking that if it were possible, it would not be even feasible under capitalism."

    …is that it's only not feasible if all free economic agents find a more profitable use of there money than producing food that costs almost nothing to produce. Profitable isn't limited to monetary terms, either. So you could say it's only not possible if no one cares to give food to those who are unable to afford it.

    As for intellectual "property," it is not a part of capitalism, as it is a form of government imposed monopoly on ideas.

  24. Are you asserting that no one will hold power over others, nor be able to increase that power? I'm not sure how that will ever be possible, in any system. For example, why wouldn't the military use its power to enrich itself economically, and take further power than originally granted by the people?

  25. Well, this post is really not about socialism and we're getting a bit off topic here. It's not really possible for me to explain how everything might work in the comments. If you're really interested you can easily find more information. You can look here.

  26. As long as you have a government that can have sway over the free market, you will always have the corporations putting pressure on them to allow bottlenecks. If you don't have a government to put pressure, then bottleneck can be achieved from monopoly.

  27. Socialism is not about big government (indeed, it aims to be stateless), Socialism is not about violent revolution (that comes from the counter-revolution). Socialism is not about prevention of trade.
    Socialism is simply about the workers taking the means of production.

  28. Monopoly rarely occurs without government intervention (e.g. IP). We see it in certain utilities, but besides there, I have trouble calling any real monopolies to mind.

  29. Furthermore, it's not a question of the existence of monopolies, but the prolonged and unbreakable existence of monopolies. So if oil companies have monopoly, competition will eventually break that monopoly, either in the oil industry or in substitute industries. Government breaking monopolies isn't an example of non-capitalistic behavior. In fact, it could be called one of the few active government involvements in the market that constitutes government pro-capitalistic behavior.

  30. There are many things where competition cannot break the monopoly. Not only that but a monopoly is very bad because of its ability to withstand market forces. Similar to the way that Walmart is using techniques that drive competition off.

    As I said, Government breaking monopolies is a good thing but when you have the government exercising control over the economy, it will be lobbied by corporations to provide the means to create bottlenecks like IP.

  31. Your description of the course of events may be correct, but if regulations existed in the face of huge monopolies in the past, 1)why? why did we see anti-trust regulation pop up after monopolies grew? and 2)why can't/won't this happen again? That's a very strong assertion to say that something can't or won't happen when it has happened before.

  32. Same question: why did we ever see regulation created to break up monopolies? why didn't those with the money and power prevent it? Your arguments up to now seem to suggest that those with the power are all powerful, or will end up all powerful. I ask the question because I think we have seen that they are not all powerful. As for the future, who knows? But I don't think history or logic leads us to believe with much degree of certainty that monopolies will come out on top.
    Microsoft's "power" is a result of IP law. It's a question of the American people deciding that intellectual property is intellectual monopoly. The presence of current flaws is in no way indicative of a failed system. In a free society there will be cyclical behavior in probably most spheres of life. The political sphere(which we can agree can translate into economic power, and vice versa) experiences its own cycles.

  33. The regulation against monopolies came out from public outcry and after the various crashes in the 19th and 20th century. After each failure of Capitalism, the politician started singing the "regulation" song without feeling even a hint of hypocricy (similar to how McCain now asks for regulation when a few years back was all for deregulation).

    These regulations passed but were slowly eroded by lobbying. Anti-monopoly laws are not completely dismantiled because common economic knowledge admits to monopoly being bad, but they have been weakened nonetheless.

    Monopoly being bad is one of the few things that everyone knows now and it's accepted as the truth, and this is the reason laws against it it survive. Unlike that however, Regulation is still a hotly debated topic with Libertarians and Free Market proponents always pulling in the deregulation direction and muddling the waters as much as they can.

  34. The presence of current flaws is in no way indicative of a failed system. In a free society there will be cyclical behavior in probably most spheres of life.

    You are talking about Capitalism? Capitalism cycles of Manias, Panics and Crashes are well understood and accepted. Karl Marx wrote 150 years ago how Capitalism will always end up in crises and how they will be accelerating in rythm…as we have plainly witnessed in the last century.

    These crises, which impoverish and destroy millions of lives, are part of the faults inherent in the system. I know we can do better.

  35. What your saying, then, is that public outcry is able to overcome the power of monopolies. Given the extremely low level of education in the United States on relevant subjects (e.g. economics), public outcry isn't as high as should be against things like IP. It would seem that any uneducated population will be manipulated. Socialism/communism/capitalism will all produce certain people and groups that control the power if the average person is either a)given political power but no education to properly use it or b)given no political power.

    I get the sense that whatever fixes or necessary conditions you have for a better system would also "fix" whatever you see wrong with free markets.

  36. I should look deeper into marxism.

    Priests, Politicians or CEOs, as always – as has always happened in history – need the lower classes ignorant and struggling. What better way to sway them to their own agendas

    The question, then, is why are these people bad (as it would seem you're saying). Why aren't those who want good change, those whose internal economics value societal prosperity over personal prosperity, in positions of power? Again, the problem of power getting into the wrong hands seems to be one of those problems that will plague any system.

  37. It seems like I should check out some of this stuff. Another time, when it's more on topic, maybe we can take a closer look at different points.

  38. I'm not certain what you mean. You're saying that since regulations happened before they can happen again? I'm not saying it won't happen again, I'm saying that it will be dismantled more quickly and that it's merely postponing the problem for a while.

    You saw how monopoly regulation has ended up as a weak slap in the wrist. The "punishment" given to Microsoft in the start of the century was a joke.

  39. Alex, the system was putting that comment in moderation. Not eating it. There should have been a message or something.
    There is no limit to the number of nested replies.

    If you want the system to remember you simply register an account with intensedebate

  40. And indeed, people who produce food have invested ways in cheaper or more productive food like geneticaly modified seeds…and then imposed artificial scarcity to keep the prices up.

  41. I agree that education is a necessary step before any move to a better world. I am personally of the opinion that our main purpose should be to educate and make as many people as possible sceptical, critical and epicurean.

    Once a critical mass of such people is achieved, change will come.

    I believe the change will be towards socialism because of the flaws inherent in capitalism but of course that is meant to be seen.

    There is a big problem however in the sense that the people in power, wether those are Priests, Politicians or CEOs, as always – as has always happened in history – need the lower classes ignorant and struggling. What better way to sway them to their own agendas.

    In any case, I suggest you check what Marxism has to say on these issues and you may be surprised. I know I was, when I first started, as I expected foaming at the mouth revolutionaries and found out brilliant minds. You owe it to yourself to see the alternatives before you dismiss them.

  42. Unfortunately, it also happened in anti-capitalist societies such as the Soviet Union or North Korea, where they end up with black markets that are basically the ultimate in unregulated free markets. As soon as the government loses its tight grip, black market tycoons start growing into even worse versions of regulated corporations. πŸ™

Comments are closed.