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Does Capitalism Cause Poverty?
Authored by Ricardo Hausmann, originally posted at Project Syndicate,
Capitalism gets blamed for many things nowadays: poverty, inequality, unemployment, even global warming. As Pope Francis said in a recent speech in Bolivia: “This system is by now intolerable: farm workers find it intolerable, laborers find it intolerable, communities find it intolerable, peoples find it intolerable. The earth itself – our sister, Mother Earth, as Saint Francis would say – also finds it intolerable.”
But are the problems that upset Francis the consequence of what he called “unbridled capitalism”? Or are they instead caused by capitalism’s surprising failure to do what was expected of it? Should an agenda to advance social justice be based on bridling capitalism or on eliminating the barriers that thwart its expansion?
The answer in Latin America, Africa, the Middle East, and Asia is obviously the latter. To see this, it is useful to recall how Karl Marx imagined the future.
For Marx, the historic role of capitalism was to reorganize production. Gone would be the family farms, artisan yards, and the “nation of shopkeepers,” as Napoleon is alleged to have scornfully referred to Britain. All these petty bourgeois activities would be plowed over by the equivalent of today’s Zara, Toyota, Airbus, or Walmart.
As a result, the means of production would no longer be owned by those doing the work, as on the family farm or in the craftsman’s workshop, but by “capital.” Workers would possess only their own labor, which they would be forced to exchange for a miserable wage. Nonetheless, they would be more fortunate than the “reserve army of the unemployed” – a pool of idle labor large enough to make others fear losing their job, but small enough not to waste the surplus value that could be extracted by making them work.
With all previous social classes transformed into the working class, and all means of production in the hands of an ever-dwindling group of owners of “capital,” a proletarian revolution would lead humanity to a world of perfect justice: “From each according to his ability, to each according to his needs,” as Marx famously put it.
Clearly, the poet and philosopher Paul Valéry was right: “The future, like everything else, is no longer what it used to be.” But we should not make fun of Marx’s well-known prediction error. After all, as the physicist Niels Bohr wryly noted, “Prediction is difficult, especially about the future.”
We now know that as the ink was drying on the Communist Manifesto, wages in Europe and the United States were beginning a 160-year-long rise, making workers part of the middle class, with cars, mortgages, pensions, and petty bourgeois concerns. Politicians today promise to create jobs – or more opportunities to be exploited by capital – not to take over the means of production.
Capitalism could achieve this transformation because the reorganization of production allowed for an unprecedented increase in productivity. The division of labor within and across firms, which Adam Smith had already envisioned in 1776 as the engine of growth, allowed for a division of knowhow among individuals that permitted the whole to know more than the parts and form ever-growing networks of exchange and collaboration.
A modern corporation has experts in production, design, marketing, sales, finance, accounting, human resource management, logistics, taxes, contracts, and so on. Modern production is not just an accumulation of buildings and equipment owned by Das Kapital and operated mechanically by fungible workers. Instead, it is a coordinated network of people that possess different types of Das Human-Kapital. In the developed world, capitalism did transform almost everyone into a wage laborer, but it also lifted them out of poverty and made them more prosperous than Marx could have imagined.
That was not the only thing Marx got wrong. More surprisingly, the capitalist reorganization of production petered out in the developing world, leaving the vast majority of the labor force outside its control. The numbers are astounding. While only one in nine people in the United States are self-employed, the proportion in India is 19 out of 20. Fewer than one-fifth of workers in Peru are employed by the kind of private businesses that Marx had in mind. In Mexico, about one in three are.
Even within countries, measures of wellbeing are strongly related to the proportion of the labor force employed in capitalist production. In Mexico’s state of Nuevo León, two-thirds of workers are employed by private incorporated businesses, while in Chiapas only one in seven is. No wonder, then, that per capita income is more than nine times higher in Nuevo León than in Chiapas. In Colombia, per capita income in Bogota is four times higher than in Maicao. Unsurprisingly, the share of capitalist employment is six times higher in Bogota.
In poverty-stricken Bolivia, Francis criticized “the mentality of profit at any price, with no concern for social exclusion or the destruction of nature,” along with “a crude and naive trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system.”
But this explanation of capitalism’s failure is wide of the mark. The world’s most profitable companies are not exploiting Bolivia. They are simply not there, because they find the place unprofitable. The developing world’s fundamental problem is that capitalism has not reorganized production and employment in the poorest countries and regions, leaving the bulk of the labor force outside its scope of operation.
As Rafael Di Tella and Robert MacCulloch have shown, the world’s poorest countries are not characterized by naive trust in capitalism, but by utter distrust, which leads to heavy government intervention and regulation of business. Under such conditions, capitalism does not thrive and economies remain poor.
Francis is right to focus attention on the plight of the world’s poorest. Their misery, however, is not the consequence of unbridled capitalism, but of a capitalism that has been bridled in just the wrong way.
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no
Crony Capitalism does. Like what we practice here is the good ol' USA.
Poor choices in life cause poverty
So does being born into poor systems.
Oh please, before Thomas Piketty blames some inherent flaw in capitalism, r>g, for the growing wealth inequality, he may want to take a look at the central banks handing money to the rich through QE.
Maybe we should try communism, oh wait, totalitarianism, oh wait, fascism, oh wait. Capitalism is the only system that can bring the greatest amount prosperity to the most people.
no.
Whomever says "yes" is either uneducated, ignorant, stupid or a paid informant.
And don't forget "deceived."
That one observes that the "system" may cause poverty is true. However, this poverty causing system is not capitalism. It is something else.
when has capitalism ever reigned supreme? where and when has there never been rules[laws] to keep the psychotic thief at bay? are we to believe there is some perfect system of capitalism? not as long as there are humans running things. ALL HAIL THE PERFECT SYSTEM OF CAPITALISM?????????
edit: see counterbalance's post below about an umpire
"when has capitalism ever reigned supreme?"
Never.
"where and when has there [ever] been rules[laws] to keep the psychotic thief at bay?"
Never.
"are we to believe there is some perfect system of capitalism?"
No. You are to understand it.
"ALL HAIL THE PERFECT SYSTEM OF CAPITALISM?????????"
No. It is not a belief system. It allows no totem poles. Understanding parties need only apply.
(Laissez Faire City, where did you go?)
Debt-based fiat money run by central planners causes crashes and poverty.
Rigging global interest rates by rigging gold prices is causing a global crash.
Market pricing of assets is not the culprit.
Judging from the voting I think the "no" comments above are misinterpreted.
They actually agree with the writers own conclusion to the question posed in the title.
Capitalism sucks. I want free healthcare and dental. Socialism is the only way to go. Word to your mother.
That fellow is quite entertaining with a breezy writing style. He's an interesting mix of traditional values, humor, and occasional leftyism.
Despite Pope Francis being wildly popular in LatAm (and, smile, among Catholic-hating US liberals), he is barking up the wrong tree.
Perhaps he is happy with the the path his native country (Argentina) has chosen Yeah, that must be it..
Jeez . . . that's quite a leap from what I said or meant. Take your straw man somewhere else.
Agreed. The State need only umpire the game (If they have any legitimate role at all). When they can be petitioned to change the rules, tilt the table or decide who can and cannot play - you no longer have a fair game (or a fun one for that matter.)
The degree to which the State engages in protecting property rights and enforcing contracts over selling their corruptibility to the highest and/or most recent bidder, is the degree to which you have prosperity. Free markets are wealth creating engines and the wealth of a nation is correlated with how much interference they need not overcome.
First, establish what the terms you are using mean.
Then, a reasoned discussion is possible.
Honest exchange with no parasitic middle man skimming off the top from both sides of every transaction, effectively at the point of a gun, would go a long way to sorting out planet earth.
If that's what you mean by 'capitalism' I would agree.
Growth in consumption without growth in what is being consumed is a recipe for disaster.
The essence of capitalism, then, is ethics, not politics.
"Man is free, we say, who exists for his own sake and not for another's."
Amen and similarly, a Constitutional Republic only works with a moral and ethical citizenry.
Yes, sir.
As George Carlin points out, The "Public" Sucks!"
https://www.youtube.com/watch?v=LrIDbABfIio
"the world’s poorest countries are not characterized by naive trust in capitalism, but by vibrants."
People are not fungible. Do not feed the animals.
There are ethical ways of running an army. The essence of capitalism is making economic decisions of one's own. Ethical treatment of people with whom one deals is vital but it's not the first requirement.
By capitalism I mean self-organized land, labor and capital set to produce goods and services at a price and cost that is derived from the voluntary exchange of all parties involved. Yes?
There is a HUGE difference between "wealth" and "well-being". Americans cannot understand the difference anymore.
Maybe Americans should recommit to snuffing out the socialists, by the millions.
Sure, after we get rid of you.
>> Capitalism is the only system that can bring the greatest amount prosperity to the most people. <<
There is an enormous number of educated people who refuse to acknowledge this fact. They will look at what prosperity and freedom people had here and be at a complete loss to explain it. Only something they've never experienced will register in their minds as the ideal system, to achieve which their present amazing economic system (what remains of it) must be trashed.
Such as welfare dependent "families"
If someone's born in a hospital that doesn't make him a doctor, a nurse, or a cafeteria worker.
TongueStun wrote:
"Poor choices in life cause poverty"
Yes, certainly here in the USA.
poor life choices can certainly exacerbate poverty. But try telling a woman in bangladesh that its her choices keeping her enslaved in a factory. Because the other 'choices' implied in the 'self empowerment theory' would see her beaten, raped, and back at the factory as before
Clearly some countries have better systems for personal advancement than others. I did write in the USA immediately above however. Bangladesh obviously is not even close to a genuine capitalist (here I mean economic liberty) system.
My point elsewhere still stands though: Pope Francis is wrong. Bangladesh is a good example.
The statement still stands as truth: "Poor choices create poverty." Unfortunately, sometimes the choices were made by your parents.
or the congressional representation of your grandparents, but who's really looking that deeply...
That's not a genuine choice between near slavery and penury or worse.
I saw a documentary about a plastic bead factory in China. Worthless Mardi Gras stuff. Hard labor, low pay, restrictions on freedom. A young woman had an opportunity to go to Shanghai and go to school but she tried it and gave up. She had a shot but chose a crumby life instead.
Like accepting free gifts that are stolen from others at the point of a gun?
Oh, and not in Europe? Not in the FRSU? Not China? Not India? Not the entire Southern Hemisphere to varying degrees?
No more than "good choices" made Goldman Sachs rich.
Paul Valery (who is quoted in the above article) also wrote: "Politics is the art of preventing people from taking part in affairs which properly concern them."
And what causes poor choices? False economic signals--like ultra-low interest rates (there's plenty of money out there). People overspend because the false booms the Fed creates with zirp and nirp make it seems like there is unparallelled prospertity when there isn't, meaning that they think their jobs are safe when they aren't, and that there will be customers for products at high prices, which there aren't.
Silly. Niggers in the Ghetto have far more opportunity to thrive than 80 percent of all the population that has ever been born in the annals of history, YET, yet, the vast majority not only don't try, but refuse to accept responsibility for themselves and their brood. In fairness, nigger culture has spread to white folk in order to appear tolerant. WTF over
Stark, unvarnished truth.
Yes, poor choices in life cause poverty. The bailouts were a bad choice and the bail-ins will be as well. QE kinda sucked, too. Damn, but I wish those rapacious assholes making these poor choices would get to experience a bit more of the "poor" part instead of the choice cuts they are dining on at our expense.
Look at all the HillaryHags junking an obvious truism. Weak simps with larcenous hearts.
And it always turns crony.
phone rings;
Yo Janet...Jamie here, need a fav.
SUre honey let me just finish my call with the boys at Goldies.
Crony Capitalism is not Capitalism. It is oligarchy.
Correct
What we have now is to free markets/capitalism as a buzzard is to an eagle.
.
Humans cause poverty!
Oh man, another "ism" article.
When the immoral are allowed to take the bridle of any of the "ism's" it doesn't matter what the precepts are.
Poverty is caused by not having enough money.
How complicated can that be?
Poverty is caused by the Relative price of goods, services and ergo wages being lopsided in one or two industries.
For example Banking / brokers / Insurance booming, with manufacturing paying nothing. Understand yet?
Trust me. It's more complicated than that. Not having enough money is the "cause?" of poverty? No, that can't be it. We don't know the "cause" of poverty. If we did, we might be able to eliminate it. But there might be many "causes" of poverty. Can we eliminate them all? Someone start a list.
Lots of people have more money than others, yet live like they are poverty stricken, and those with "less" money live better. Proverty is often a state of mind; an unfufilled material expectation that is just that, material expectations. Otherwise, how is it that poor people can have dignity? Not many have dignity in this country whether lower class or not.
A tumor is not the cause of cancer.
US bankers found poor nations and offered them loans.
They then offered them more loans and more and more...
Then they had to pay it back and have been poor ever since.
Like Greece, but Western bankers didn't used to shit in their own back yard.
the banks then take over their resources and infrastructure when they can't pay. the elites of the country help to facilitate all of this and are rewarded. "Confessions of an Economic Hit Man"
Not only are they now currently shitting in their back yard, they shit the bed with US 2008 bailouts and subsequent flushing down of the US middle class. The shit-roosters have come home to roost.
Why did they do this?
The rest of the world has been over harvested, and the low lying fruit now lies in the Homeland.
Neither did politicians but now that is their defining characteristic, with v. few exceptions. Full speed ahead onto the rocks of "diversity" and national suicide.
Do boats cause water?
nice.
Only just as the monopoly's introduction of new currency into the economy causes the production of value.
Pithy and spot on, +1
Damn, I wish I had thought of that. Nobody liked my money idea.
"If cocaine is a drug, I am a junkey" D.Maradona
Democracy always causes a reset in society when everybody votes for mor handouts and populist who are all to willing to bankrupt a nation for a paycheck.
And the reset comes by the introduction of fascismeto protect the assets of the once who have by forces.
Followed by a revolution that turns into communisme of socialisme again.
But nobody gets to live to see that full cycle.
nd we're still in the end of the first. Just read Zh comments and you'll see there's plenty of those who dream of QE4 where they're handed thousand of dollars. It won't happen but there's plenty who only want money others will need to pay back.
A society is founded by 1 principle: people serve society and not the other way arround.
And all people dream of now is how society can serve them, and that will be the downfall to fascisme.
And not a single person can fight it because the state always has bigger guns. And in America's case: once fascisme arrives, it will be one of the most brutal in human history that will last for a hundred years.
Poverty is slavery.
Believing that racism is the cause of one's troubles is slavery and slavery guarantees poverty. We have all three in spades.
There is no doubt: existing capitalism is providing superior performance than any existing or tried form of communism. I would suggest though that there are countries that use forms of democratic socialism, where capital is permitted to function, and provide a much balanced form of society and where the citicens live a very high quality of life. These countries like the Northern europian countries, Switzerland, Austria, Canada, Australia, New Zealand and many others have societies recognized to provide a good quality of life, while having government programs that could be classified as socialistic.
If there is deficit spending in those countries then there will be collapse. That kind of genteel socialism will just take longer to crash, with the exception of lunatic Sweden which strives to crash immediately.
Man causes man's own problems.The rest is "literature"...
It was the best of times, it was the worst of times...Is aptly said for today's world; the dividing line between the 1% and the 99%, and could lead to that other world of a Tale of two cities!
We all have our best first lines in literature...
Lolita, light of my life, fire of my loins... Is a more interesting topic than fat men and their greed.
Or the one oft quoted from Anne Karenine.
Why do we keep talking about the fight between "invisible" and "algo guided" hand of markets? Capitalism is the other face of totalitarianism.
I prefer a capitalist I can see get handcuffed to a HFT algo that I can just see get bankrupt.
That's a human trait and not just in literature but in real life.
You start off with poverty (a bunch of people standing around doing nothing living in the dirt).
At which point the more intelligent segment of people self-organize according to their skill-set and produce goods that raise the standard of living.
The only part of capitalism that promotes poverty is central banking and the ability of individuals to form corporations at the drop of a hat to escape liability for the misconduct of their businesses.
If everyone that ran a business/operated the enterprise was held personally liable for their own conduct within a business (letter of the law) and there was no central banking capital would always allocate to where it was needed in order to best grow the economy.
Central banking arises from the idea that one meglomaniac can dictate into existance profits for unprofitable enterprises.
There was a time where profit did not mean you exploited your fellow man to raise your standard of living while lowering your fellow mans.
There was a time when profit meant that capital was expended and society had a net-benefit in the coversion, while those responsible for the net-profit to society were rewarded slightly for their effort.
Since then we have tipped into a canibalistic form of capitalism (the cancer known as central banking has taken us there), where there are no longer net benefits to society but only for the few.
Your points about profit are too general and they include both profits from central banking and from the capitalist enterprises described by the author. The latter (profitable) enterprises lift many boats and are unobjectionable.
Your objection to central banking is well founded.
Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.
This is known as “bad luck.”
Robert Heinlein
If someone creates something that others want they will profit from the situation.
I have a question....
What do bankers create?
Debt.
They used to provide access to capital savings (other people's deferred consumption) so that it may be put to work. If once lent it's productive use could not support repayment plus interest - then it would either not be loaned out or the collateral of the borrower would be liquidated to restore the principal and any losses would come out of the banker's profits. This dynamic would in the aggregate affect the interest rate earned by the saver providing the capital and the expense and profit of the bank. Competing banks offering a higher percentage return and better selecting their borrowers would hold a competitive advantage.
The current banking system does very little of that of course and in their capture of the government prevents any activity as simple as that described from being offered by competing interests.
They facilitate the creation and operation of enterprises with money raised efficiently from local (?) resources.
Dow Futures down over 100 at this time. Better batten down the hatches.Were in for another rough ride next week.
Gold up +4.60us
That down 100 will dissipate 5 minutes after the markets open. After that it's BANG...ZOOM TO THE MOON ALICE!!!
Communism fails when the leaders think they are moar equal than others.
Capitalism fails when the leaders are greedier than others.
America was an exception when Carnegie went around building libraries, Ford designed a car for the masses, etc. It was a recognition that you could still become rich by elevating the lower classes. Today there is no thought of raising the lower claseses (any more than the gubmint has done), but rather to look globally for suckers to buy your products.
1
Henry Ford at least realised that if he didn't pay his workers enough they wouldn't be able to afford his products.
Then came offshoring.
Offshoring came after the Bolshevik invasion of the Unions.
So, the banks don't run the place, Unions do???
WTF are you smokig???
Oh, apologies, you are a clown on acid.
Ford did what he did for a reason. Ford was a proto-capitalist. By that I mean he owned the company and planned on passing it on to his sons and then to his grandsons. He didn't base decisions on the next quarterly report, he based decisions on what would benefit the long term health of the company. Part of that was paying his employees well.
Corporations today are typically not controlled by a proto-capitalist owner like Ford. They are run by neo-capitalists who have sufficient political skills to worm their way into a CEO position. When they do, they are about 60 years old and have perhaps 5 years to loot the company for everything they can get. Usually at the expense of both the employees and the stockholders. They have no interest in the long term health of the company, or any humans associated with it.
Hmm maybe the world just needs a reminder of what progress is made of.
You point to Ford building a car for the common man , one that he could afford.
Lets look at todays problems
People need
-Affordable housing (It would be great if my mortgage wasn't 5000$ a month)
-Affordable transportation (It would be great if my car didnt burn 50$ in gas a week and if the highway didn't cost me 2 hours a day in traffic)
-Affordable food (It would be great if I could buy non-gmo insecticide free food for 1/2 what it costs today)
-Affordable energy (If those pesky solar panels didn't cost 90,000$ it would be great)
-Affordable Communication (Tel-Com It would be great if 8gb of data on my cell phone didnt cost 200$ a month)
-Affordable way to escape debt without losing assets
There are the problems of our generation.
Those who think up solutions that work stand to profit a great deal, all the while helping their fellow man.
Live small.
Work close to home & ditch the debtmobile.
Cook good food from scratch.
Live small.
Ditch the tracking device, I mean cellphone.
Avoid debt in the first place.
All of these things work. You profit personally and that's the important part.
Like on a plane, if the oxygen masks come down, put your own mask on before trying to help anyone else. You are more help if you are breathing!
I understand your frustration.
Let's look at the causes of your problems before seeking solutions.
-Affordable housing (we live in an inflationary environment where the FED is supporting a housing bubble in the hopes of illiciting a wealth affect through swelling housing prices.)
-Affordable transportation (the fuel efficiency and reliability of motor vehicles has never been better. Most transportation expense comes from being forced to live further and further away from economic centers.)
-Affordable food/energy/communication (Most of these have gotten cheaper over the long term but these expenses are made more difficult by stagnant wages even though prices grow by 5-10% year.)
-Debt (most people have come by there debt by making poor decisions. Poor decisions can be expensive. They belong to the decision maker. If it is necessary to proceed with Bankruptcy, that can be a good option for some people.)
Primary causes of these problems are debasement of the value of the dollar, inflation of asset classes and their unintended consequences.
Solution seems to remove the barriers to true price discovery and to return to sound money.
Expansion of credit and the accumulation of debt by making things appear to be affordable through ever greater expansion of repayment terms is the root problem of our society.
Could a home ever have got to $375k for a 1200sq ft home in a town that looks like the backwoods of West Virginia if it weren't for the expansion of credit?
Would oil have ever gone to $150 a barell if it weren't for cheap loans at near zero percent to the big banks?
Debt is the greatest inflator of bubbles because it allows people to purchase more than they can afford, but makes it seem like they can.
And the barrier to true price discovery for debt (the price of consumption in the present over future consumption) is centrally planned and controlled. People will respond to incentives and if your make current money free as future money, people will load up. Now you have all that "future" money chasing the same current assets and voila!
It fails when leaders obtain the power to tax, regulate, and destroy businesses. A desire for riches is in there but they got involved because of the power.
I don't fear Boxer's or McKinney's greed but their desire to tell others how to live or to punish them
First of all there isnt any magical system to solve people problems and needs. However capitalism shouldnt be a system of too big to fail and too important person to put on jail either. Capitalism that I have seen in my life time is super rich never pays the price of their mistakes and wrong calculations. Profits are private but debts ,economic problems and final ugly bill is general.
Don't you think words should mean something independent of the understanding of the person using the word? I don't think we get to decide what 'capitalism' means. Just because a system is referred to as 'capitalism' does not mean it is capitalism. You are describing a system that would be better described as fascism or corporatism, but is definitely not capitalism.
Orwell in 1984 shed light on the issue.
War is Peace, Freedom is Slavery, and Ignorance is Strength
Redefining words is a powerful way to manipulate people, but it's not a great way to develop understanding.
No one is urging any such redefinition. It's the left that's continually wanting to distort meaning when a word becomes uncomfortably accurate.
The excellence of this article is the author's focus on the basics of capitalist enterprise and pulling no punches that it involves wage labor. Which has been great for working people and where they live.
Even countries identified with capitalism are rarely purely capitalist but a hybrid socialist/capitalist design that often adds more socialism as time goes on. As it adds more socialism into the mix, the economy will start to slow to a crawl and even reverse more years than grow. Of course, its then identified as a failed capitalist state by socialists, who then push for even more socialism
There are a whole lotta grey areas between the meme generators definitions of Capitalisim and Socialism.
Don't be that guy that replicates memes that are generated from the top down.
Memes are supposed to be generated from the bottom up...
not top down...
If it was only that simple. See capitalism needs a fine level of socialism just to exist or otherwise it quickly reverts to feudalism. For capitalism to exist, you need a referee, a functioning body that wiill create and govern the rules of the system. This includes government to create the system, military, police and judicial system to protect personal property and liberty (to some extent apparantly). Now what is ailing US is not socialism per se, but the fact the governing body became independent of the people and more dependent on the important few people with big pockets. Hence crony capitalism. Hence US does not have socialism issues, but capitalism issues. Even Obamacare which resembles socialistic healthcare is anything but. There is no greater good, regardless of what democrats say, only big profits of healthcare parasites - insurance industry and big pharma. Why dont they make it afforadable for all like in Canada which would be socialism and make it all cheaper (charge a hospital bed as much as best western for example and not Ritz). Now there is a special type of socialism produced by crony capitalism. When the wage workers are too poor or out of work, they cannot create consumption demand, get hungy and start thinking about overthrowing the system. In austrian school with honest money this is where creative destruction happens. However when you have cronies on top, they don't like the idea of creative destruction of their propery. So welfare is created to uphold the current capitalism structure. The poor will not revolt and the companies of the rich will continue making profits of the money borrowed by the government and paid for by the middle class in the end. Hence this socialism case is completely caused by aging capitalism where the capital owners on the top do not want the creative destruction to occur. And when it blows, capitalism is to blame if not for the fact that downturnes did not happen more often in small bursts. And than there are other types of socialism. Let's take Venezuela for instance, the revolucion way. The problem there was natialisation and destruction of free market. The government is a bad owner of oil (all) companies and an even worse employer bcs government in such countries employ people based on their political views (to get a public job you need a party card) destroying incentive for good workers. Destroying capitalism and free markets so that you can make cheap milk, bread, eventualy causes lack of these bcs no one wants to produce them. And than lets take the case of the nordic countries, the love thy neighbour policy. They are fairly rich and have positive balance sheets, which is why they heavily redistribute income (like 60%). They still have capitalism, free markets, freedom, etc. Very few beggers and container pickers. They have healthy levels of consumption demand created by an equal society. Hence nords might be on to something. The only thing that I would change there is that I believe tax should be based on property, not income. Capitalism itself is not the problem, just unbridled capitalism which over time gets old and needs to die to be reborn.
Excellent analysis, outlaw.guru!
Excellent. Exactly right.
Edit: I will add that crony capitalism is not aging capitalism but perverted capitalism. For one, the betrayals of the Supreme Court allowed the federal government to grow to immense size, as did the income tax and a central bank. Had the govt stayed within constitutional bounds there would have few goodies for it to hand out.
Second, fedgov began to regulate business like crazy to play social justice warrior. As a gent above observed, pretty soon that acted like a drag, capitalism gets the blame, and socialist clamor for more regulation. (Clearly, regulation is the new socialism rather than ownership of the means of production just as cultural Marxism was substituted for workers' armed revolution.)
As I said elsewhere, if there is deficit spending in socialist countries, they will eventually crash no matter how genteel they may seem. If you look at lunatic Sweden in particular you will see that a distinctly vicious side to the government has appeared like a boil. There is a dishonest vendetta against free speech (as in all Western countries) and an obvious willingness to use or countenance the activities of the local AntiFa variant.
On top of which, you have the govt's lunatic, fanatical determination to flood Sweden with mass third-world immigration even to the point of reducing income, services, and housing for native Swedish pensioners. It's ugly and it's obvious why fascism (socialism with a corporate face) and communism are kissing cousins.
Ask John Perkins why he thinks third world countries are poor.
right
ask the british empire how they acquired all of their wealth..........they stole it from the ROW, just as the american empire does.......
Ho hum, Howard Zinn tripe. Stole nothing; exploited it yes, stole, bull. The British Empire spread economic development (elements), concepts of democracy, rule of law, and ended slavery. Polly wanna a cracker?
I guess you don't read a lot of history.
Without colonial "exploitation" the mineral and other natural resources of Africa, Arabia, and the Americas would be safely under control of the natives where it had always been -- under the ground or the oceans, untouched for all time.
This pope is a moron. Perfect example of capitalism, I bought a good piece of hay land, aquired the equipment to work it, then busted my ass all summer long. I sold hay to people who voluntarily traded their money for it. I made 10k this summer...thats fucking CAPITALISM.
Massive banks that are supported by the government and who are given monopolies backed by government force to manipulate the economy ARE NOT CAPITALISM. That is the exact OPPOSITE of capitalism. It is government control and government interference with the market on a collossal scale.
You can't make it any clearer than that.
A flood of unrelenting Illegal aliens which has been lowering the standard of living for most is whats causing more poverty. Illegals taking some of the jobs that blacks might take means unemployment among blacks continues to climb. Many of the Illegals are still getting paid under the table. Working the summer as landscapers, working in the housing sector and other areas that blacks and other low skilled americans could be working. Its only going to get worse as long as we continue to allow more of the leaches in. And don't forget the Migrant Muslims Obama has been bringing in under the cover of darkness. Somalis, Syrians, Iraqis and other mostly Muslims since Obama doesn't want Christians here. Almost all of them end up on our welfare system, thus adding to Americas growing poverty.
Thank you.
A monumental betrayal of Americans in favor of foreigners. It's unique in the history of man. No government ever worshipped foreigners as Western govt's do. Ever.
Massive numbers of foreigners only ever gained access after defeat of the people's armies. Now we invite them in by the millions and pay them with tax money.
Possible exception: Rome.
the only ism that matters is BANKSTERISM
''Capitalism is Usury. Its defining belief is ‘return on investment’. This is an extension of the ‘time value’ of money, which is the central tenet of modern economics. Capitalism is unthinkable without banking and banking is institutionalized Usury.
Usury is Plutocracy. Compound interest makes it unavoidable that the very richest own everything in generations. ''
https://realcurrencies.wordpress.com/2014/06/05/capitalism-is-jewish-usu...
Capitalism isn't usury. USURY IS USURY! SOrry for yelling. (How so many people could screw up these simple ideas is beyond me)
what kind of asshat says capitalism is synonymous with usury *facepalm*
Hey Pope Frank...ever come across this in your Bible? Even Jesus said that the poor are here to stay.
Matthew 6:26-6 11
6Now when Jesus was in Bethany, at the home of Simon the leper, 7a woman came to Him with an alabaster vial of very costly perfume, and she poured it on His head as He reclined at the table. 8But the disciples were indignant when they saw this, and said, “Why this waste? 9“For this perfume might have been sold for a high price and the money given to the poor.” 10But Jesus, aware of this, said to them, “Why do you bother the woman? For she has done a good deed to Me. 11“For you always have the poor with you; but you do not always have Me."
Never understood why a book written so long ago is considered a good guide to how to live today.
Crystal spheres anyone?
Kosher rules likely made sense in a desert environment with no sanitation and no concept of micro organisms, but we've since invented fridges and understand where diseases come from.
How do you know you can trust this Matthew dude, anyway?
Neurocysticercosis is common outside the US
We are seeing more T. solium and T. saginata in this country now due to immigration. Even schistosomiasis. We used to just read about these parasites in books. How pleasant I get to see them first hand now!
Miffed
Oh the horror. Some of those barbarous old rules still make sense.
Dont kill, dont steal, dont lie. Something the banksters should learn.
There isn't ONE microwave recipe in it!!!
What did those ancient morons know?
Prolly written before we solved the mental health problem.
What is not Capitalism?
Certainly the world is not. Capitalism is not practiced intentionally anymore-so than is Christianity.
The abomination is perversity. The abomination is attempting to lie.
Pretending.
Doesn't work-:)
Christianity???
When did that last work?
Turn of the First Millennium.
Constantinople.
Crusades.
Heresy and Inquisition.
Protestant reformation.
Conquest of Central and South Americas.
Witch burning.
Johns town.
I apologize for the lack of detail, but the Christian clerics were real go getters in the past coupla millenium.
I guess if you have god on your side, you don't actually have to give a fuck.
What an astonishing intelligence you have, Dear Boy.
Lack of detail is the least of what you should apologize for.
I think you mean Jonestown.
Pope Francis should visit Goldman and the Fed while he is in US. He could wash Blankfein's feet, then massage Yellen's.
.....right after he got finished with the shoeshine boy.
If criminals don't go to prison, criminals brake more laws.
I don't blame capitalism.
I blame a marxist DOJ.
I blame a marxist CFR.
I blame all of you for letting it happen.
I accept the blame.
We will find you Eric.
Finally.
Ok...so what you are saying is blame the Banks Mgmt and their owners.
Everybody likes a good cartoon: https://youtu.be/0wzKlYULCkU
This one is 60 yrs old.
I rember that cartoon and country.
Very long on Bushmeat.
Honest capitalism is the only system that permits growth. The U.S. probably never did have honest capitalism, but the dishonesty didn't affect ordinary citizens the way it does now. Dishonest capitalism becomes Imperialism of Capital, fully explained in the old 1889 book "The Great Red Dragon: Foreign Money Power In The United States." FREE, via University of California. Google it or take the link at http://GreatRedDragon.com (Due to the times, the old book blamed it on Jews. In my mind, I replace that word with "financial sociopaths" who may or may not claim to be Jewish.)
Is there a limit to the growth that Capitalism allows?
No, because real capitalism allows for destruction and failure.
When the misallocation of capital causes a business to fail, it allows others to take its place.
Kind of like pruning a tree. The problem we have today is that nobody is cutting the dying branches and the tree is an overgrown monster putting too much pressure on the trunk. Even though parts of the tree are healthy, the entire thing will fail when the trunk splits in two.
Destruction and failure of the corporate entity, yes, but what about destruction and failure (or exhaustion) of raw materials, employees or the capital (monetary or not) itself?
You can prune a tree all you want, but if the soil quality is terrible, it's still going to die.
About 3 billion people have been lifted from abject poverty since 1980 only because of free enterprise. Not the Soviet/Chinese economic model, but the American (former) model.
Given a fresh planet to be able to plunder using the technologies provided by industrial revolutions.
The Chinese approach but on a new planet?
There was nothing "free" about what happened since the 1980's. About 3 billion people were lifted from poverty by plundering the USA, dismantling our industrial and manufacturing systems,and funding massive trade deficits for decades. Not a hint of capitalism anywhere in all that.
Why ZH site is so slow, with such excessive and cycling JavaScript?
Dont you have programmers at all?
Or they were all consumed by TBTF evil cabal?
Because every f**king thing on every web site is now a damn streaming flash video.
Install "AdBlockPlus" a freebie plugin, and you will see HUGE improvements in responsiveness.
It's been close to a century since we've had capitalism. This has been a ride through cronyism.
Capitalism is letting things take their natural course without excessive intervention from Washington DC and letting the deadwood be cleared out when it fails.
FDR, LBJ, the Fed, statist democrats and the RINOs have really magnified it.
Yes, the advertising and bad coding here on ZH really takes a toll on the browser. It's getting ridiculous.
Replace "cronyism" with "institutionalized corruption", and you have it.
Does Capitalism cause poverty? I dunno, its the only system no one has ever tried yet.
" the Americans always do the right thing. After they have tried everything else"- Winston C.