What’s wrong with capitalism?

April 1, 2018 • 12:30 pm

Before I’m thrown into the basket of alt-right deplorables because of the headline, what I’m asking is this: “Is there any better economic/governmental system than free-market capitalism combined with appropriate government regulations against its excesses?” The reason I’m asking this is because I’ve seen many Leftist bloggers attack capitalism as if it were the root of all Western evil, something to be ruthlessly expunged. (These are the same people who get their overpriced macchiatos from Starbucks.)

The kind of capitalism I don’t find problematic is that in Scandinavia and Western Europe, and the kind that we could have in the U.S. were the government a bit more compassionate.  Now I’m not an economist, and can’t rattle off every danger of an unregulated free market lacking government safety nets, but surely we need regulations that will help those who can’t survive in that system, or who fall through the cracks. We need government medical care, taxes, help for old people, and a variety of social services beside the free market. We need regulations to prevent unethical business practices, the purveying of misrepresented or dangerous products, the creation of monopolies, and so on. This is pretty much above my pay grade.

But I ask those of you who are constantly harping on capitalism, indicting it as evil, and calling for its destruction: what alternative do you propose?   As I believe Steve Pinker pointed out in his latest book, any society that has eliminated capitalism but has tried to be democratic—or maintained the pretense of democracy—has failed. Capitalism is, after all, a form of economic freedom.

Well, you weigh in. What alternatives are better than a humanely regulated form of capitalism in a democracy?

This is an extreme example, but there are many other non-loons who espouse pretty much the same sentiments.

191 thoughts on “What’s wrong with capitalism?

  1. “Is there any better economic/governmental system than free-market capitalism combined with appropriate government regulations against its excesses.”

    The answer is no.

    1. “Is there any better economic/governmental system than free-market capitalism combined with appropriate government regulations against its excesses.”

      I would tend to say no myself.
      However there are three words in that phrase that raise doubt: free, appropriate and excesses.
      Those three words have been causing strife since man’s and bonobo’s shared common ancestor first tried to share bananas.

  2. It’s not clear that people that call themselves “anti-capitalist” or even “socialist” are, in fact, advocating the elimination of capitalism.

    I do think that to eliminate the plutocracy we now have requires generating some anger at those who’ve rigged the game in their favor and that might tend to generate some hyperbole.

  3. I don’t know if this is a good comparison or not, but it reminds me of nuclear energy. Can it be done really, really badly? Yes. Can it be done well? Yes. Do we probably need it to sustain our energy needs even as we transition away from fossil fuels? Yes. Do some people hate and fear it? Totally.

    1. “Do we probably need it [nuclear energy] to sustain our energy needs even as we transition away from fossil fuels?” No, not really, we could have gone virtually completely solar years ago.

    2. In all the discussion about nuclear power, I have yet to see a safe, workable plan for dealing with the spent rods. And, BTW “rod” carries the impression of something like a curtain rod, but what we’re talking about is far larger. Maybe there is a good solution, and I just haven’t heard it?

      1. [1] NEAR TERM: Some form of the many variations on a molten salt nuclear reactor is probably the near-term solution. It doesn’t use rods & if so designed it can ‘eat’ rods already in storage. It’s supposed to be inherently fail safe. There is waste, but nowhere near the problem of spent fuel rods [I think]

        [2] LONG TERM: In the distant long term we can hope for fusion nuclear power [inherently fail safe too] which might be available on a commercial scale [powering cities sort of scale] in one hundred years. There are many, many proposed designs that are realised from the one simple principle in a wide spectrum of different ways. The only waste has a fairly short half-life – that includes the structural cores which will take less than a hundred years after going off line to be easily manageable [recyclable]. There’s a lot of unknowns such as what the life of the structural materials might be – this problem applies to all reactors fission & fusion.

        Which is all very well, but where’s our plan? The Chinese might be the only nation making plans far into the future [not great plans as it turns out]

        It is my belief that power generation must be resilient & it’s an error to rely on one type of source. We must plan as best as possible for what is fundamentally unpredictable / unplannable as best we can! Increased automation at all stages of food production & supply with the consumers distanced in understanding & locality from the supply will bite us on the arse at some point. Same is true for transportation, water & other utilities, clothing, housing, communications. One good kick & civilization unravels with limited possibilities for a rebuild.

        For those reasons it’s a good plan to decentralise, depopulate [fairly gently], restore small self-sufficient communities, bury consumerism in a grave so deep that people laugh, point & jeer at people who get that glitter bug [from private jets down to branded jogging shoes & handbags].

        I fear for the world to come that might depend almost entirely on robot electric vehicles for people, goods & services. That reliance on single-source power generation is not smart. The communities of the future should be so designed that they can survive without such bells & whistles if needs be.

        1. The old uniform was north face and uggs. Now it is Canada Goose even if we never really need it. I see people wearing their Canada Goose when it is over thirty. Disgusting Conspicuous Consumption.

          1. I know one of their top end coats will price out at a small second hand car.

            North Face & Uggs [with sweat pants] was somewhat generic – the girlie student straight out of bed & into lectures. That was juuuust before the spray tan & thick eyebrow look hit the world of girliedom I think.

              1. I meant to say, I think I know what this is all about, but I never saw this kind of consumption before

          2. Canada Goose is how I tell the person has money. It’s also a cruel brand that uses leg traps on coyotes to get their fur. I refuse to have anything to do with them, not to mention, as you say, it’s nowhere near cold enough to need to wear such garments.

      2. @Helen H. It is about a certain emptiness & shallowness in peoples lives – we are consumer lab rats now.

        The marketers have refined their methods with detailed datasets collected & collated for pennies using newly cheap computing from many interlocking sources: Habits & ‘engagement’ for… TV [especially the new Smart TV], cable, YouTube likes, Pinterest, Instagram, facebook, Twitter, YouTube, Siri, Google search history, Alexa, Disqus comments, accurate footfall counts for all the shops on Main Street, tracking customers in stores to see where we gravitate to, eye tracking software, etc etc.

        Our reactions to our experiences & events in the world are being measured & turned into data. One day ‘they’ will have a simulacrum of each of us & they’ll be able to make us ‘better’ consumers – all the delivery systems for creating frivolous want are in place on an almost individual basis. ‘They’ will know before you do that you’re wanting to relive that perfect Alpine skiing holiday of five years ago when the marriage was fresh.

        All this knowledge of people means nobody will bother with winning votes through coherent policies [manifestos] – it’ll be about pushing peoples buttons, in the same mindless emotive way as X Factor, for ever & ever.

        The future is Philip K. Dick on steroids & I think people can feel it coming.

  4. All of the social programs we lefties like are funded by the taxes on capitalism. The government has no money of its own unless it runs the printing presses, which would cause runaway inflation and economic collapse.

        1. More strongly, been tried many times, on multiple continents and in various forms and has never worked.

            1. That’s a good point. The economic system in the former Soviet Union was state capitalism, not socialism or communism. See the critiques of the Trotskyites.

    1. The Market has no money at all unless it’s defined by government. See Money in J is for Junk Economics: A Guide to Reality in an Age of Deception.

      1. But the market does produce inherent value. The money part is just an abstraction to make trading easier. It doesn’t even need to be defined by a government, cryptocurrency like bitcoin isn’t and although it’s not universally accepted, it is a form of money.

    2. Taxes do not fund expenditure of a Government that has a sovereign and fiat currency. Taxes a) remove money from the economy as a means of controlling inflation, and b) are a means of favouring some groups, issues or policy directions while penalising others. There are a few other reasons, but none of them are to do with generating revenue for Government expenditure.

      State or local government taxes and levys do fund expenditure.

      A Government that has sovereign and fiat currency does not need to borrow money to fund expenditure. Bonds are not borrowed money. They are (largely) corporate welfare.

      A Government that has sovereign and fiat currency could buy every good and service in the country, using its currency, if it so chose. The international value of that currency would then be negligible, but hey.

      Most of the money in our economies now is in the form of pixels on a screen, not even paper or metal anymore. Government expenditure is as simple as pressing a button.

    3. Sorry I’m late to the party, but this is exactly backwards. All of the U.S. dollars in existence were created out of thin air by government spending. The U.S. federal government is monetarily sovereign. It, and it alone, can issue dollars. It does not get them from taxes. It could not get them from taxes unless it first gave them to people for goods and services, because the people who pay taxes do not create the dollars.

      Now it is true that all of the wealth of the nation is created by people working at productive enterprises (whether for profit or not), but wealth is not money and visa versa.

      In the U.S., the government has been running the printing presses since the founding of the nation, and we have never had runaway inflation in spite of having accumulated something like 17 trillion dollars that have not yet returned to the government via taxes. And while inflation (not runaway inflation, but ordinary debilitating inflation) will be the result of unlimited government spending, we would have to be operating at full capacity with full employment before inflation becomes a serious constraint on spending.

  5. I think those who are jumping all over capitalism are grabbing the wrong end of the snake. If capitalism is the problem then what is your suggested alternative. Socialism or something to replace the unwanted.

    More likely it is the amount of government intervention that is off course and missing. In the U.S. we just cannot get it right and maybe never will. The fact that taxes have become so hated would seem to confirm this fact and so, the place is quickly being taking over by the rich and the few. That is where we have been headed now for around 60 years. This steady progress has been taking place regardless of party in charge so the future is Oligarchy. Hey, same as Russian.

    1. One of my favorite tax paying stories was about a recent immigrant from Denmark (a dairy farmer) who finally made a profit. His CPA was prepared to have him be outraged at the size of his tax bill, and was thinking of the best way to soften the blow. To her surprise, he was not upset at all. He said he considered being able to make enough to owe that much in tax was a good problem to have, and that paying it in was a form of economic patriotism.

      1. Yes, I’ve seen polls that suggest that American’s don’t resent paying taxes, although they do resent it when others cheat.

        Taxes don’t bother me at all. All of our incomes are higher than the would be without taxes, because the money flows to the government and back out into the economy, creating demand that will eventually come back to me.

        1. There is no understand by people in the U.S. as to what a fair tax is and what it should be based on income. We know not nearly enough is being collected because we know the debt is huge. But also, do we know that the top 20 or so people in the country now own 50% of the wealth? Just try to comprehend that number.

          What caused all of this, you may ask. Just look east to Washington DC and you will see this giant business called LOBBY. Travel down K Street and at the same time notice that most of the firms and people on K street worked for the govt for a while and were even politician before they graduated up to lobby. This is your government folks, pure and simple. The rest is just for show. I should also remind you that your vote today means almost nothing and as long as the lobby industry and K street remain, it will continue to mean nothing.

          1. One could take a position that economic inequality is a natural consequence of existence. History suggests that inequality only reduces during times of war or major crises. So fighting inequality is not necessarily a good idea since the alternative is worse.

            That being said, it does not much matter if the rich continue to get richer as long as the poor (and the rest of us) are dragged along for the ride and everyone’s life improves. That should be the case for strong govt regulation.

            1. That last paragraph is where it all goes bad. The theory we will all do better if we just let the rich and the big corp go nuts has not worked. The economic conditions have gotten much worse for the average and the poor. The rich continue to get a larger piece. So where is govt. and when will it come to the rescue? Forget it because govt. is weak, ineffective and working for the rich. So what is next??

              1. Indeed, that last paragraph is the problem as the fact is that the gulf between the rich and the middle class (much less the poor) is wider now in the USA since the days of the “Robber Barons”.

                Unchecked by government intervention free market capitalism makes the rich richer and the poor about the same. If you are middle class or lower on the USA socio-economic ladder then on average your wages and standard of living have not improved since the late 1970’s. This due entirely to government policy that favours the rich.

                I do agree that with our current level of technology that free market capitalism is the best system IF combined with sane and compassionate programs that redistribute wealth.

                That last statement, I hear, makes many Americans, including one who would be helped, rather angry.

            2. Trickle down, floats all boats, call it what you will: the American economy hasn’t worked that way, at least since the neoliberals got hold of it. I always think of Alex Rosenberg’s convincing put-down of economics as an ersatz science and shouldn’t therefore have a Nobel or be respected by genuine scientists. However, French economist Thomas Piketty’s book, ‘Capital in the 21st Century’ showed pretty powerfully that inequities in wealth/income have been steadily increasing, and he predicts the rate of increase will itself increase. Though Pinker rather glosses over Piketty’s work, I find it sufficiently unideological to compare favorably against the domination of the Chicago School.

              Surely part of this undemocratic phenomenon of increasing wealth inequality is owing (npi) to the parts of the so-called free market that don’t make a product other than money, which makes more money and power, and so on in what appears to be a feedback spiral that will leave a very few wealthier and the rest of humankind. . . .

              I know that the concept/reality of THE MARKET has changed from one of goods and services, and from the labor theory of value, to an abstract place where one can trade electronic bets on which crow will caw first and what that will mean in the short and long runs.

              But chrissake (sorry, Yeshua, I know it’s a big day for you), it’d be nice to have the bespoke suits and the wearers within them come out of their virtual realities way up there in the sky offices, have a look around on the ground, and join the clean up one of the oil spills ’caused’ by their manipulation of crude oil futures. Remember, I know you do, that the CEO of BP lamented his postponed nation. . . .

              1. ol’ spellin’ checker got me again: the dude lamented his postponed VACATION

            3. I think, Mr Hayward, that you have misunderstood the point about inequality only getting less during times of war or major crises. And certainly the lesson you take from it is a non sequitur. Yes, inequality has lessened in some cases because of wars and other social crises, but it does not follow that it is therefore the struggle against inequality that creates these social crises. For it has been in the first place inequality that has created such crises, and the consequence of a collapse of political and social orders brought about by inequality and injustice has been a movement towards greater equality.

          2. Isn’t this just supply and demand? Lobbyist work for groups who sell things to and represent the local folks from home. If we didn’t buy guns or airplanes or bridges or medicine then there there wouldn’t be any need or benefit to having lobbyists.

      2. Right on!! I have always thought this way. And if it wasn’t for the underground economy, oh the programs we could all benefit from.

  6. Dear Mr. Jerry Coyne

    I believe that socialism, capitalism, Marxism etc…is base off, who’s is in (people that think in terms related to altruism)charge. So, it’s not the ideas that are wrong but the people who put them into practice.

  7. Capitalism is the best way to generate wealth and innovation. But it inherently redistributes wealth from the bottom to the top and consolidates wealth and power in the hands of a few.

    A strong government is needed to constrain that redistribution and power grab. (One of the reasons the Republicans want a weak government.)

    The democratic socialism seen in much of Europe has proven to be the best so far at making sure capitalism serves the entire populace, not just the 0.1%.

    1. I’m not convinced that capitalism redistributed wealth to the top. I’d suggest that most of the wealth goes to the broad middle. Government intervention is needed to look after the bottom, not the middle.

      1. I know a few capitalists who tried to redistribute wealth to the top by offering starvation wages. They couldn’t recruit enough workers, and the ones they found stole from the company. So the greedy bosses, teeth-gnashing, had to redistribute wealth back to the bottom and middle. (Still more than enough goes to the top, don’t pity them.)

    2. Completely agreed. But the forces of rampant, unconstrained capitalism are eating away at it, at least in France and Sweden, two countries I know a bit about, since I live in one and my wife comes from the other. We are in great danger of having our system replaced by one in which there are no limits to the market. (This is in the European Lisbon Treaty, once know as the “project for a European constitution”, which France and the Netherlands voted against in 200 — to no avail.)

      Social democracy is definitely my preference. A wonderful case for it is made by Tony Judt in his last book, “Ill fairs the land”. It is not theoretical, it has been tried and it works. At least until eaten away from the inside.

      1. On another subject. The text in the reply box on this site (and many others) is a kind of pale gray on beige and very difficult to see if your eyes are not younger than mine. I am obliged to type my replies in a text editor, then copy them into the reply box.

        There are whole web sites with such colors which render them readable only with great difficulty or with a browser plugin. I wish something could be done.

        Sorry for the complaint.

      2. Social democracy, particularly as defined by Tony Judt, is definitely my reference as well. But I’d like to point out that the actual Lisbon Treaty of 2009 is not inherently an enemy of social democracy. Right-wing politicians, of course, do sometimes present their ideological programs as things “required by the EU”.

    3. But then how does that explain the billions of people rising out of poverty in the last 50 or so years? Sure the rich might be getting richer (and getting richer quicker) but virtually everyone else has been rising too, at least if you are looking from a worldwide perspective.
      The fact that rich people have a lot of wealth does not necessarily mean this wealth was “taken” from anyone since it’s not a zero sum game. If my house rises in value because of (market forces) it makes me wealthier, but whose wealth has been taken?

      1. The fact that rich people have a lot of wealth does not necessarily mean this wealth was “taken” from anyone since it’s not a zero sum game.

        Sadly, in today’s Finance Capitalism, the majority of the 1%’s income is zero-sum. See Free Lunch in J is for Junk Economics: A Guide to Reality in an Age of Deception.

      2. I acknowledge that progress has been made. Pinker has it right. However, some ultra-rich really do take more than they should. Sure, it’s a judgement call but I am happy to make it. Those that have profited enormously from transaction costs and market manipulation do not deserve what they’ve earned. While I acknowledge that the “financial services industry” does provide needed services, they’ve become rich from taking advantage of flaws in our system and lack of effective government oversight. I would also include the many middlemen in our health care system that make their money from gaming the system’s inefficiencies. Government is responsible for creating a playing field that is both efficient and fair, and serves the people. They’ve mostly fallen down on that job.

  8. I don’t understand the hatred of capitalism by the left. I quite enjoy it but there are some things the market can not solve like health care. I think when people think it can, what they are really asking for is the talent, ideas, and resources to solve some of the problems of health care.

    Capitalism with controls seems fine to me. What people have to understand is capitalism is amoral. It isn’t there to solve all the problems, it is there to make money, but it is a viable economic model and part of a successful democracy.

    1. Exactly, capitalism makes money and drives innovation, which helps everyone. The key is in controlling that money once it’s made, and directing it toward policies and initiative that help all of society. Of course, the accumulation of wealth drives the ever-increasing production of wealth and innovation, so a balance must be struck between those who drive it being allowed to keep much of their wealth, and redistributing some of it to society as a whole.

      But that drive for wealth has always been and always will be a part of human nature. Capitalism works because it allows that drive to exist and be harnessed for the good of society, and for that drive to be channeled and restricted so it doesn’t become a destructive force, as it was throughout history before modern capitalism with appropriate restrictions.

    2. Diana, I’m not entirely convinced by the healthcare argument (at a practical level I think you are right but bear with me). The real problem is the market distortions that are built into the system. No rational individual would look at a healthcare system like that in the US (with private for-profit insurance companies that absorb around a third of the funds, benefitting only themselves) and pick it as a good option. It exists because of a history of market incentives, including the huge tax subsidies to the insurance companies that exist by making coverage a pre-tax item (as opposed to a direct tax, per the NHS, for example).

      My guess is that starting with a clean slate, the only cost-effective way to go would be single payer. Unfortunately, (pending our dear leader’s glorious revolution) change is evolutionary, so things get cobbled together on top of the existing mess.

      1. I think that if you look to markets to provide health care, you cannot help but have unfair health care, simply because markets are profit driven and health care isn’t a problem solved by profit. In other words, there are profit losing things that must be done in health care that are for the good of the society not the profit maker.

        1. Even worse, the insurance and pharmaceutical oligopolies have a stranglehold on the US medical system.

      2. We have a single payer and are not happy with it. We want more payers. Meanwhile, we have found some interim solution in having the single payer pay only for the basics, and patients supplement the rest, often illegally.

    3. That is what social democracy is about, recognizing that some things are best left to individual initiative (capitalism) and others best managed collectively (another bad work in american).

    4. Not just health care but freedom to leave crushing poverty for billions of people, especially young women. We have been seeing this in China and India and many other poor nations.

      While many Westerners decry sweat shops in these countries the poor flock to them because they will be better off with the job than without. Not to say there hasn’t been abuses (locking workers inside factories which burn down) but on the whole the factories have been a net positive.

      For many young women (or girls) a long hard job at least gives them the choice to not be forced into an arranged marriage and start popping out children while tending the fields.

      These sweat shops or garment factories have allowed many countries (Taiwan, Brazil, South Korea and many others) to move from third world country to industrialized and on to a modern economy.

      Planet Money from NPR did a series of articles on the subject using t-shirts they had manufactured as an ‘in’. PM follows the manufacture of the t-shirts from the cotton fields to delivery. Unfortunately it’s not that deep of an article:
      Two Sisters, A Small Room And The World Behind A T-Shirt

      In another article the authors state garment factories jump started economies, created choices and wealth for workers, allowed more industry and consumerism. Once there was enough industry besides the garment industry wage demands increased due to competition for labor until the garment industries looked for cheaper labor. These garment industries have done this for over a hundred years.
      The article states Bangladesh is not expanding their industrial base out of garment factories, indeed garment factories are increasing. It’s possible it may not follow the traditional path. They don’t speculate why.

  9. The necessity of capitalism is the same as that of democracy as laid out by Winston Churchill in a post-war speech to the House of Commons:

    “Many forms of government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except for all those other forms that have been tried from time to time.…”

    Just replace “democracy” with “capitalism.”

    Of course, unbridled capitalism can and usually does become destructive, but proper government regulation will keep this from happening. No other economic system has ever come close to producing the many successes of capitalism: drastically and continually increasing standards of living; drastically and continually reducing infant mortality; causing a slow and steady march toward the liberation of women; increasing human rights and freedoms; giving people greater individual choice and power over their lives; increasing the opportunities for climbing the social and economic ladder; and many, many other critical developments.

    It’s always strange to me when I see people claiming that capitalism is the root of all evil. People like Dan Arel (who we know says many stupid things about many subjects) never have a good alternative but to try systems that have failed again and again, invariably stripping much of the progress capitalism provided from the people who are forced to abandon it. Every country that has forced an alternative system has ended up causing death and destruction, increases in infant mortality, decreases in freedoms and mobility, and restriction of people’s power over their own lives.

    I think people like Dan Arel attack capitalism because they see it as “The West,” which the consider to be the source of all evil in the world. They have no idea what should be done, only that they’re angry and they’ve decided (likely based on what the people around them have decided) that The West must be destroyed, to be replaced with…something.

    1. “No other economic system has ever come close to producing the many successes of capitalism: drastically and continually increasing standards of living; drastically and continually reducing infant mortality; causing a slow and steady march toward the liberation of women; increasing human rights and freedoms; giving people greater individual choice and power over their lives; increasing the opportunities for climbing the social and economic ladder; and many, many other critical developments.”

      Regarding the liberation of women and increasing human rights and freedoms, you are conflating a political system (democracy) and an economic system (capitalism). They are not one and the same. An economic system should not be credited with what was accomplished by a political system, although they often go (although not necessarily) hand-in-hand.

      1. Capitalism can be credited (in conjunction with democracy) for giving women increasing freedom over their sexual lives by reducing the conditions that inhibited high mortality among the population. The conditions that led to high mortality weren’t alleviated by democracy, but by the increase in wealth, innovation, and medicine produced by capitalism and the industrial revolution that came with it. Abortion and contraception became increasingly acceptable because high mortality was severely reduced and the need for extreme population growth for a country became less and less of an issue in need of immediate attention.

        It can’t be denied that democracy as we know it has developed concurrently with capitalism, and perhaps because of it, but I don’t know of any evidence demonstrating that democracy in fact produced capitalism. It was after monarchies began falling that capitalism rose and, with it, democracy. Democracy cannot be solely credited with the advances mentioned in your and my comments. We know that increases in wealth, standards of living, medical treatment and its availability, and a philosophy of individual freedom and rights result in the further liberation of individuals and, in particular, women. Women have, over the years since capitalism began to develop, successfully fought for the rights attendant to control over their bodies. Before capitalism, the high infant mortality rates, deadly disease rates, low life expectancies, and poor healthcare (for both women and men) made choices for women — especially when it came to sex and reproduction — extremely limited, and understandably so, as population growth is required in any system for a country’s continued success. Giving women control over their reproduction is likely the result of population growth no longer being in a precarious state in the places with the most functional capitalist systems.

        By contrast, countries where capitalism isn’t properly implemented and/or where all the advances mentioned above have not completely taken hold invariably do not offer women the same protections and controls offered by capitalist first-world nations.

        1. Capitalism had a role to play in democracy and freedom but it was part of much bigger initiatives after WWII, namely the formation of the World Trade Organization and lots of other stuff that came out of the Breton Woods system, the creation of the UN and it’s declaration of human rights which countries signed on to, the changing attitudes toward colonization and loads of other consciously decided things aimed at making the world a very different place from what it has been prior to WWII.

          1. And also, in Europe and elsewhere, the creation of social democracies that were intended to prevent the kind of social instability that led to the desperation and social and political collapse that resulted in communism, fascism & naziism. Social democracy (which certainly involves capitalism) is, and has been for a number of years, under attack, as Tony Judt, Pierre Bourdieu and Thomas Piketty have pointed out.

            I really haven’t noticed anybody among the commentators here ‘constantly harping on capitalism, indicting it as evil, and calling for its destruction’, as Professor CC seems to suggest. Rather the opposite, it seems to me, as the commentariat, or rather a part of it, seems to be moving steadily towards the right. Hatred of capitalism can certainly be found on the left (chiefly among those who are unable to take a critical attitude — which does not entail lack of respect — towards Karl Marx), but it really is far from correct to claim that the whole of the left either is or always has been opposed to capitalism.

            1. Jerry didn’t say commenters here have been railing against capitalism. “The reason I’m asking this is because I’ve seen many Leftist bloggers attack capitalism as if it were the root of all Western evil, something to be ruthlessly expunged. (These are the same people who get their overpriced macchiatos from Starbucks.)”

              He asked for responded from people who rail against capitalism, but he was calling out bloggers, as demonstrated by the quote. Nor has he claimed that “the whole of the left either is or always has been opposed to capitalism.”

              This is reminiscent of the other day, when you claimed that mayamarkov said she was perfectly happy having the label of white supremacist applied to her, when all she said was that it seems people apply that label to anyone like her who supports certain policies, clearly implying she was dismayed by that fact and the dishonesty of that practice.

              1. If Professor CC was inviting anti-capitalist bloggers, and not commentators, to give their opinions, then I apologise for mis-reading hm. But I am definitely not going to retract what I said about mayamarkov who has said a great deal more than what you claim she said. ‘Certain policies’ indeed!

              2. Tim, for all your condescension toward those with whom you disagree, you sure are evasive when anyone asks for evidence. Not that I expected you to provide any, because you can’t, because it doesn’t exist.

              3. Very well, I shall try to spell things out. If you re-read mayamarkov’s remarks in that thread, you will discover that people other than myself have called her out – rather more politely than I have, doubtless, but that is by the way. She has on previous occasions advanced the idea that ‘races’ should keep to themselves and not try to mix, and accused Angela Merkel, in connexion with refugees, of behaving like a gay man with AIDS who purposely goes around sleeping with others so that they, too, may become infected. You may have noticed her attack on ‘Black Lives Matter’, in which she mentioned only the case of Michael Brown, as if there had not been a great many other cases of black men and boys being shot for no reason at all by police or by self-appointed vigilantes like George Zimmerman, who like many such murderers, whether official or not, generally get off scot-free (I contributed a little to a fund organised by Trayvon Martin’s parents so that they could bring a civil suit – perhaps you did, too?). Black Lives Matter is not just about Michael Brown – as mayamarkov of course well knows – but about people having had enough of what is systemic racism. I am not American, but one thing that is very clear is that race is fundamental to American politics, and fundamental to an understanding of it.

                You talk of ‘certain policies’ as though policies are invariably benign and well-meaning or at least innocuous. Well, they very often are not.

                In my youth, I worked as a labourer with West Indians, Sikhs and other ‘races’ if one wants to call them that, made friends with them, and was invited to their houses on occasion. I also saw some of the racist attitudes they had to deal with. I worked at one time for a very nice Jewish man who was from Czechoslovakia originally, who survived the Nazi occupation and recalled Sudeten Germans being hanged from lamp-posts at the end of the war; he managed to get out as the Communists took power. In Europe over forty languages are spoken between the Atlantic and the Black Sea, and as the collapse of Yugoslavia showed, with, notably, its massacres and rapes of Bosnian Muslims, it is all too easy to arouse hatreds between peoples. Britain is now a nation that willy-nilly includes many citizens who are not echt-Englisch, as is the States: it is simply not possible to put the clock back or kick everybody who is not properly white out, any more than it is in the States. It is not possible for races in one nation to live wholly separate lives unless some sort of apartheid system is introduced.

                Again, I am married to a Japanese and have lived for 45 years in Japan, whose right has a very strong racist ideology (and pace certain other commentators on this thread ‘racism’ or ‘racialism’ does not have a ‘neutral’ meaning), and when this nihonjin-ron (theory of the Japanese) was at its height, I along with others, such as Karel van Wolferen, Alan Booth, Roy Andrew Miller, Ross Mouer and Yoshio Sugimoto, wrote against it. (The people I mention were far more important than I was.) And now Japan has its most right-wing government since the war.

                And what are these ‘races’ that people talk about so glibly? Go back to the 19th century and look at what supposedly intelligent English people were writing about the Irish ‘race’ and its resemblance to African ‘savages’. Or, to put the boot on the other foot, read certain Celtic nationalists and discover what they say about the racially different English. (In fact, DNA testing has shown that – if recent immigration is excluded – people from all over the British Isles and Ireland are genetically pretty similar, whether they are supposedly Celts or Sais (Welsh for ‘Saxon’)). I think that is enough. I find racism loathsome, and I find people who advocate it loathsome.

              4. Final sentence: ‘I find racism loathsome, and I find people who advocate or tolerate it loathsome.’

              5. A whole lot of words, a whole none of quotes. Just a long screed about her not agreeing with you on some things.

              6. A problem I have is that perhaps because I am being ‘punished’ or ‘discouraged’ for being too much of a gadfly by the management, if I comment I am never notified of new comments despite ticking the requisite box, and do not receive notifications of new comments, and am unsure where I made the comment you are complaining about (perhaps you could tell me where it came, and then I can give you as many quotations as will make you feel satisfied).

                mayamarkov’s comment did not come across to me at all as being the innocuous little thing you allege it is, particularly in the light of subsequent comments she made. In no way did it come across to me that she felt ‘dismayed’ by being called a ‘white nationalist’ — for, as I recall – perhaps wrongly, but I think not, it was this term she used and not the ‘white supremacist’ you say she used. It seemed to me that she was rather revelling in it, particularly in the light of the vicious comment about the ‘Black Lives Matter’ she subsequently made.

        2. BJ

          I would argue that many of the advances that you attribute to Capitalism and Democracy were more significantly related to quantum leaps in technology which led to mechanisation and mass production and other accidents of history.

          Capitalism is just a description given to the private trade part of the State economy.
          By the same argument Socialism could be defined as the public sector part of the State including government.

          Both of these elements existed in pretty much all states existing before the terms capitalist and socialist became more formally defined in the modern period.

          European “Capitalism” was favoured in this respect by the discovery of the Americas which made available a whole new continent providing massive space for expansion and resources.
          It could hardly lose in the world market whatever its economic ideology.
          The precise model of Capitalism or Democracy is probably not that significant.

          The change in roles of women could perhaps be attributed to increased affluence, education and involvement in the economic workplace.
          As I understand, population control is always dependent on affluence.
          Obviously affluence comes from successful trade. Countries not becoming affluent have lost out in the economic battle or failed to gain access to new technologies, or found themselves in the wrong geographical position etc.

          Many of these countries have also been invaded, colonised and inhibited by wealthier “Capitalist” countries. Capitalism in the modern sense was defined in a period of European Imperialism coupled with a burgeoning US economy that for eighty years or so was founded on African slave labour.

          Capitalism is a description of the economy occurring and evolving in these situations. Describing it as causal to those changes is highly debatable.

          Obviously commerce, democracy or political model, technology are all there somewhere in the equation, though it is pretty hard to attribute cause and effect.

          1. But industrialization, which initiated the enormous boom in wealth creation and technological innovation, coincided with and/or was the impetus for capitalism. Moreover, the capitalist system that was implemented to help with these sectors progressing further quickened their development. If we can agree that these advances resulted in the many benefits on which we agree, I think it’s logical to agree that capitalism itself did, if not in whole, then at least in conjunction.

            I don’t think capitalism is in any way repsonsible for colonialism, as colonialism has been a part of the world since civilizations were created. In fact, reduction in colonialism only finally happened after a couple centuries of capitalism.

            1. Capitalism, it can also be argued, has, like colonialism, been around for centuries. It has been argued that the Roman Empire was capitalist. I was not arguing that capitalism created colonialism: I was discussing the phase of European colonialism that coincided with and followed the discovery of the Americas.
              I was arguing that certain things which are often attributed to Capitalism are in fact more due to other factors such as geo-political considerations and that changes in the economic model amd be resultant rather than causal.

              The centre of European power had shifted from Byzantium to Italy with the Renaissance at which point the Italian banks came into existence. With the discovery of the Americas, the centre of power shifted Westwards to Spain and Britain and it is not a coincidence that the religious reformation occurred at the same time as European economic power shifted North and towards the Atlantic.
              Banking evolved before the Industrial revolution and allowed for the hoarding of wealth in the form of money whereas previously acquired money would need to be progressively converted to property in order to accumulate wealth.
              To use the single word capitalism to cover both the US slave/cotton agrarian economy before 1860 and the modern highly computerised and tokenised financial services of the 21st century is not really very helpful.
              Capitalism doesn’t really mean much without defining which model you intend and is an umbrella term that really just means private sector enterprise of which there are loads of possible models.
              It is also fairly meaningless without defining the political model within which “capitalism” is functioning. Government is by definition regulation on the economic model. Democracy, because it makes decisions with economic consequences, therefore regulates the economic model.

              Unregulated capitalism CANNOT be democratic, because democracy IS regulation: ALL government is regulatory.

              I think that is why people get heated over capitalism. The political, ideological models disagree so widely on how that regulation is to be applied and many are diametrically contrasted and incompatible.

              1. I guess I just don’t understand how any of this is an argument against what I said regarding how modern capitalism has channeled greed (while allowing it to continue to exist, since it can’t be stamped out) and been the ultimate creator of wealth, innovation, and all the rising standards of living in the last couple of centuries. I’m not sure if you’re trying to negate that claim. It’s not like I don’t agree with most of what you said here, but I thought you were trying to contradict what I had said about capitalism raising the standards of every problem in the past couple centuries and reducing those other problems that cause terrible misery and high mortality.

              2. I think I am challenging the idea that capitalism has been the principal cause of the improvements that you mention: if you apply slave labour to early nineteenth century US cotton market the economy flourishes and its called capitalism. In the same period you apply late mercantile/early free market thinking to colonialised Ireland and you end up with a famine and mass emigration, typhoid and starvation. There is not much common ground there.

                If you have access to an empty, new continent with almost infinite resources it will flourish. You can apply the same economic thinking, calling it capitalism too, to an economy like Ireland and it fails to feed the population while wheat and meat are being exported under a “healthy” economy.

                My point is that it is not the economic model that counts, it is geopolitical and technological one. Capitalism is not geopolitical, its an economic model (actually it is a group of models). Obviously the economic model has some effect in terms of the efficiency of the system etc. but the main difference lies in the way that capitalism is regulated.

                I have recently tried debating Libertarians/Objectivists. If you draw attention to failings of the capitalist system, they inevitably claim that the real failing lies with bad government, too much regulation, the mixed market or cronyism. They say these failings would be absent in an unregulated economy. They claim many things as successes of capitalism, which I would argue are often due more to other factors as I have been arguing with you.

                At best the rapid growth of the early US economy was based on rapid transit of a slave/agrarian economy to post industrial with an easy access to a European market based on colonial exploitation. Where is the virtue of “capitalism” in that? How does that type of capitalism relate to the modern world?

                They are not even closely the same thing. The US is no longer a new, unexploited continent. It’s got 300+ million people, trades in finance and services, its resources are stressed, is driven by Corporations, is a massive importer of manufactured goods and its having difficulty competing economically with China and India.

                The economic models here are so vastly different that they can hardly both fit within the concept of “capitalism”.

              3. I think you’re getting caught up on what can and cannot be called “capitalism,” but I tried to make clear that I’m talking about the modern capitalist system used in first world nations. The one that continues today to provide the advances I’ve discussed.

              4. Most of the first world countries are better described as mixed economies, that is regulated free-markets or if you like Socialist/Capitalist or public sector/private sector hybrids.
                Since the capitalist element of an economy cannot be defined without the regulatory part (I used socialist here because this part consists of collective public ownership and services which enforces laws and regulates the private sector), it is not really a reasonable claim that capitalism is the producer of wealth and prosperity. It is the overall model which determines the end result.

                Capitalism (whatever that actually is) can only supply wealth if the context is favourable: it is not thanks to capitalism that America was discovered and had resources available to exploit and fuel. It was not thanks to capitalism that new technology came to be available at that time. Private markets were involved, but they are not the whole story.

                It is the public sector and political choices made which define what happens in an economy. It supplies legislature, judiciary, armed forces, police, and in most cases in the first world countries you mentioned, also education, training, transport infrastructure, healthcare, care of the elderly and unemployed, public safety and environmental regulation.
                The private sector is generally not suited for most of the things I just mentioned, since the latter are mostly related to spending on services rather than to competitive profit driven activities.

                The well being of a country can be measured by the quality of its services as well as its private sector. It is also the public sector regulation which helps define the economic model: the private sector otherwise will just do its supply and demand party trick.

                My point here is that to give all credit to “capitalism” is an unbalanced argument.

                If the history of capitalism was so wonderful and it were such reliable supplier of evenly shared well-being, why were there attempts to find alternatives like Communism and Fascism, several calamitous economic collapses, several world wars?
                Private markets can produce wealth, sure, but when they get it wrong, they really do get it wrong.

                I am not “anti capitalist”. I just don’t see it as the panacea. It’s got major defects and limitations, which have to be identified, tuned and regulated. It can’t self regulate.

                I wouldn’t actually use the word capitalism. I would just call it the private sector and then define the specific mixed model of which it is a part.

              5. Kevin, I understand what you’re saying, but I started this entire thread with a post that contained this: “Of course, unbridled capitalism can and usually does become destructive, but proper government regulation will keep this from happening.”

                I feel like Jerry made clear in his post that we’re talking about modern capitalism, which involved a mixture of social policies and regulation to ensure we don’t suffer the consequences of unbridled capitalism. If you wish to not use the word “capitalism” to describe a capitalist system with regulations and social policies, I guess that’s your prerogative, but I fail to see how it’s not simply a more developed form of capitalism.

                If the overwhelming feature of these economies are capitalist in nature — stock markets, corporations, privately owned businesses and industry, credit and loans from private banks, trade between private industries, etc. — then they are capitalist systems that have adopted social policies solely by the government and solely in the sector of providing benefits (like healthcare and food stamps) to the people. And we do know that switching to this type of system did immediately precede the explosion of benefits we’ve discussed.

                Google defines capitalism as “an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.” This is a perfect description of what we see today. All the other things we’ve added are just new features and regulations. The system itself is still a capitalist one.

            2. @BJ
              [Google defines capitalism as “an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.” This is a perfect description of what we see today. All the other things we’ve added are just new features and regulations. The system itself is still a capitalist one.]

              “an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state”
              That is not what we see today: the government regulates the private sector by taxation and other constraints in what is a “mixed economy”. The public sector may be as big as 30% GDP, that is HALF the private sector.
              That definition will also cover a Fascist or Nazi or Private Corporate State economy as well as the current US one or so-called Socialist economies say in Scandinavia or even a military dictatorship or banana republic where the property owners collude with the generals.

              “just new features and regulations The system itself is still a capitalist one.”:
              that is the whole point: those features and regulations are what DEFINE the economic or political model.
              Capitalism is only one attribute of an economic system.

              The current Chinese model starts to fit also within the definition of Capitalism as you give it and also the post USSR Russian Oligarchy. The term starts to become rather meaningless except as a partial descriptor of some of the economy.

        3. “By contrast, countries where capitalism isn’t properly implemented and/or where all the advances mentioned above have not completely taken hold invariably do not offer women the same protections and controls offered by capitalist first-world nations.”

          Man, seriously, you should visit Cuba and mingle with the people, live a bit with them.

    2. ‘Of course, unbridled capitalism can and usually does become destructive.’

      What bridles and breaks for riding the otherwise untamable stallion called Capitalism? The polis. When I hear someone say government should be more like a business I think (and sometimes reply): no, government isn’t (like) a business: it enables business.

  10. A decision has already been made – an alternative has already taken over …

    “Capitalism is, after all, a form of economic freedom.” … the essence of economic freedom has already been displaced by control mechanisms, such as progressive income tax of wealth and income, fiat currency, central banking wedded with bankster banking, planned inflation, and heedless debt. It’s cartel corporatism, not capitalism as originally birthed.

    Yes, the powerful benefits of pure entrepreneurship, with strivers founding valuable and worthy enterprises, still operates and bring huge advances. Yes, we have a thriving ‘general prosperity’ and a social safety net, paid by taxing enterprise.

    If you call that mixture “capitalism,” so be it.

    I contend that an ‘alternative’ to what we now have is …. capitalism.

    Note: the needed services listed by Professor Coyne in the article would not have to be annihilated. Quite the opposite.

  11. I believe most criticisms of capitalism start at the ground floor, property ownership. Without going into entangling and complicated histories, most property, and hence power and money, was taken long ago by force. Then culture and laws were erected around the “land grab” to protect it.

    While capitalism tends to add much wealth to the world, it had this “original sin.” I personally know of no better system nor could I suggest one. But I can understand why people feel the way they do.

        1. Well, a personal anecdote. We – my family – stay packed 3 generation in a 2-bedroom flat in order to save for some machines. Some our friends, up to their ears in mortgage for fancy housing, complain that they dream of their own business but have no funds to start it.

  12. “The kind of capitalism I don’t find problematic is that in Scandinavia and Western Europe, and the kind that we could have in the U.S. were the government a bit more compassionate. Now I’m not an economist, and can’t rattle off every danger of an unregulated free market lacking government safety nets, but surely we need regulations that will help those who can’t survive in that system, or who fall through the cracks. We need government medical care, taxes, help for old people, and a variety of social services beside the free market. We need regulations to prevent unethical business practices, the purveying of misrepresented or dangerous products, the creation of monopolies, and so on. This is pretty much above my pay grade.”

    Indeed. I share this view. I call such a system “bounded capitalism.” Free markets generally work well, but not always. In cases such as a steep economic decline, the government must step in to restore stability as well as when the danger of monopoly arises. Unfettered free markets allow for no social safety net. Moreover, tight government regulation is necessary in areas of product safety, workplace safety, and the environment. Finally, it is the role of government to make sure that capitalism does not result in extreme disparities in the distribution of wealth. Such a situation, which is evident today, results in social unrest, something capitalists hate. So, for me, capitalism works best when it stays within certain bounds. The role of government is to make sure that it stays within them.

    1. But that last sentence – that is the one that has failed. It has failed for many years and apparently will continue to fail for many more. Rome lasted much longer and the British Empire, although shorter, lasted longer than we will. When government fails there is nothing left for Capitalism to do but destroy itself.

    2. Fully agree. Health care, product and workplace safety and the environment need other Mechanisms than a ‘free market’.
      Democracy can be seen as a way to fight about how much regulation and how much ‘unbridled capitalism’. About where the ‘reasonable’ balance is. Western Europe (and the European Community) in its ‘social democracy’ appears to stress the needed bridles on capitalism more than the US, while remaining basically capitalist. They appear to do quite well with these ‘bridles’ (the great problems in Western Europe due to Islamic immigration is a different matter, I think).

  13. I think our public discourse needs to define at least two or more types of capitalism. Perhaps “Crony Capitalism” in which the revenues of the government are doled out based upon favoritism. Perhaps “Corporate Capitalism” in which the rules and regulations favor the profits of corporations over the welfare of individuals. Perhaps “Social Capitalism” in which the rules and regulations favor the quality of living of the mass of individuals. I think we could have more constructive conversations if we could commonly agree upon a few different types of capitalism.

    1. Indeed. See also Finance Capitalism, Casino Capitalism, Money Manager Capitalism, Pension Fund Capitalism, and Pentagon Capitalism, in J is for Junk Economics: A Guide to Reality in an Age of Deception.

  14. I’m foursquare behind free enterprise; it’s the great engine of western prosperity. What I find insalubrious is the heavy concentration of vast amounts of capital in the hands of a few.

    And I haven’t seen any good come from inherited family fortunes. The first generation earns it; the second generation gives society museums and libraries and hospitals. From then on, it tends to devolve to the idle rich.

    1. I’m reminded of Henry Miller and his perplexity at money:

      To walk in money through the night crowd, protected by money, lulled by money, dulled by money, the crowd itself a money, the breath money, no least single object anywhere that is not money. Money, money everywhere and still not enough! And then no money, or a little money, or less money, or more money but money always money. and if you have money, or you don’t have money, it is the money that counts, and money makes money, but what makes money make money?

      1. From Black Spring, if memory serves, Miller’s book between the two Tropics, written in Paris at the height of the Great Depression.

    2. I think at least a significant amount of money should inherited by family, for two reasons: (1) it seems intuitively unfair to many that they should spend a lifetime working as hard as they can to give their children the best lives possible, only to have all the money they worked for revoked upon their death, and (2) one of the greatest drivers of many parents to work as hard as possible is to pass that money on to their children to ensure them a good future. Estate taxes are a good idea, but I think they should stay where they are (especially the rule that any inheritance under $11.2 million goes untaxed).

    3. Also, for immigrants who come to the country with little, accruing wealth and passing it on ensures that future generations really will have the kind of security and mobility in this society that the immigrant parents did not. It’s one of the best ways to ensure increased growth and assimilation as generations pass beyond the first immigrant generation.

      1. Jeez, BJ, I don’t want to deny immigrants a shot at the American Dream, or to keep parents from passing on a nest-egg to their kids. Hell, this isn’t even one of my policy hobby-horses. It’s just that observation suggests that having vast fortunes tied up by single families for generation after generation is detrimental to the commonweal.

        1. Of course, and I would never suggest that you would want to do that! And I agree that fortunes like that of the Walton’s should be drastically reduced and redistributed. I think a single inheritance probably shouldn’t be abllowed to go above $500 million, after which all is taken. Anything below that should get maybe a 25% tax. Anything below, say, $20 million should be tax free. That’s how I see it.

      2. I’m not following BJ. Why does someone need to leave their kid $11.2 million, approximately 100 times the median American net worth, to assimilate or give them a stable future?

        The average person makes like $50k a year in the US, meaning a 40 year career comes to $2 million in income. $11 million is 5.5 lifetimes of labor income given to someone without lifting a finger, and we don’t tax a dime of it.

        I think the estate tax could be far more stringent and the same work ethic would be there. Even if inheritance didn’t exist there would still be huge advantages to having money to provide for your kids as they grow up. And I simply disagree that most parents are motivated by wanting to leave their children vast fortunes.

  15. Both naturalists and engineers knows the kinds of things that usually happen with unregulated systems.

    Capitalism is great for people if it’s tuned to maximize what’s great for people. Arguing what is “great for people” is fine, but arguing against regulation is bad engineering.

    But getting rid of capitalism would be a risky experiment on a large country (as we’ve seen). Anti-capitalists should experiment on a much smaller scale if they think they have a game changing idea.

  16. From a computer science perspective, capitalism is a simple, elegant algorithm which solves a lot of problems without any special coding. Socialism is all spaghetti code.

    1. As the old quote goes.
      “For every complex problem there is an answer that is clear, simple, and wrong”

      The problem is people group a whole range of different things under capitalism.
      Pure “capitalism” is about as useful as pure “socialism”. Nice in theory but impractical in practice.
      A mixed economy is the one which has been proven to work.
      The USA is actually a good example of this although it tends to hide the extreme market interventions under the defence spending.
      The problem is by attributing the successes of a mixed economy to “capitalism” the extremists are trying to undermine the mixed part of the model.

    2. If you think modern Finance Capitalism is simple and elegant, then you don’t understand the situation.

    3. “From a computer science perspective, capitalism is a simple, elegant algorithm which solves a lot of problems without any special coding.”


      What algorithms do you use, derived from which economic model of capitalism?
      Have you allowed for exogenously determined variables?
      Have you allowed for destabilisation by unpredicted circumstance?
      What is your predictive model for supply and demand?
      Have you applied trend analysis to allow for the effect of all markets on all other markets?

      Capitalism always works within regulatory constraints: no capitalist system has ever existed without governmental constraints. Have you allowed for such constraints within the algorithm?
      Have you ensured that the model mirrors the real world.
      What about the problems that are outside the “solves a lot of problems”? What about the problems it can’t solve. What about the problems it causes.
      What are the long-term feedback results of these unsolved, unmanaged problems on the viability of the model.

      You should publish the source code of this “simple, elegant algorithm”: you will be sure of a Nobel or two.

      “Socialism is all spaghetti code.”
      Since we will never see your “simple, elegant algorithm” for capitalism, we will never see the spaghetti code either.

      The “Socialist” or regulatory part of the model is unavoidably entwined with the Capitalist part. Any algorithm HAS to encompass both. Human decision, say due to democratic choices can skew the model. Natural catastrophes. Economics changes drastically in times of war. Government intervenes more drastically: changes the model. Don’t permit that and you will lose the war, because capitalism is mindless in itself and cannot defend your country in time of war or respond to famine or natural disaster.

      All economists know how difficult (or impossible) it is to produce a viable mathematical model for an economic system.

      The main problem is that if you propose a hypothetical model, it might work until somebody does something which is not included in the model. Humans will ALWAYS change the model as it is applied to reality, so the algorithm will never work with any certainty. There is economic profit to be gained by breaking the model to your own advantage.

      Get only one of the many mathematical variables slightly wrong and the accumulative affect will throw the model to the point where it is totally meaningless.

    4. My guess is you are comparing capitalism ideally implemented to socialism poorly implemented. Not a fair comparison.

      BTW, I am not arguing here for one of these over the other. Our current system is a combination of capitalism and socialism but its implementation is getting worse by the day.

  17. Well this is a can of worms but I’ll try to explain what’s wrong with capitalism in evolutionary psychology terms.

    First, what capitalism has right. Humans are extremely competitive by nature and we can use that competitive nature like an engine that drives innovation and prosperity. Now what capitalism has wrong. Our competitive nature is not to compete for personal wealth and resources but rather to compete for tribe status. In hunter gatherer tribes where the majority of our social nature evolved, tribe status was given to those who were the best providers for the tribe. Status was given to the best leader, protector, provider, friend, care giver, medicine man, etc. Not to the best hoarder and seller.

    If you got caught hoarding or trying to amass personal wealth and resources, you suck, and you got kicked out of the tribe. If you killed a gazelle and kept it for yourself or tried to sell it to the rest you were likely killed or shunned by the rest. Those that survived and gained status, therefore passing on their genes, were the best cooperators who shared with the tribe the goods they acquired.

    Capitalism grants tribe status to he/she who amasses the most personal wealth rather than he/she who does the most for the good of the tribe. It’s really that simple. We could easily incentivize doing good for the tribe as a whole rather than amassing the most personal wealth. Unfortunately, in capitalism, doing good things for society is only one possible way to amass personal wealth. There are too many other ways to amass personal wealth that either do nothing to help society, or worse, actually harm society greatly. Eg. Polluting, funding wars for the interest, making products that fall apart quickly so people have to buy more.

    It would be easy to devise a system where the sales people are not incentivized to lie to you sell you a product you don’t need. However regulating that practice out of capitalism has proven to be impossible.

    Alternatives? They are out there, but suppressed by capitalists who lose when society as a whole wins. Google “participatory economics.” This should work much better than capitalism. But fundamentalist capitalists will continue to scare monger any ideas that lead us away from capitalism as communism, Marxism, socialism, things we’ve tried and proven they don’t work. They are right that those three don’t work. But wrong that there are no other alternatives.

    This is so surface and there is much more to discuss of course and I could go back and forth with commenters here forever. But suffice it to say I think capitalism sucks and there could be a much better system. Also, I am rich. I am not a poor person who thinks the system has ben unfair to me. I am a rich person who thinks society would be better getting the most out of everyone and we are not doing that now. Billions of useful people are wasted to crippling poverty. So you don’t get to tell me I am lazy and looking for a handout. I’m fucking rich and successful.

    Finally I’ll say that I do not think capitalism is “something to be ruthlessly expunged.” I don’t even think capitalism will be overthrown. I think as technology advances, capitalism will become weirder and weirder until it is just too weird to continue.

    Okay let me have it.

    1. It is too easy to let you have it:

      “Now what capitalism has wrong. Our competitive nature is not to compete for personal wealth and resources but rather to compete for tribe status.”

      Your analysis of problems is based, not on actual problems, but on making the is-ought Naturalistic Fallacy [ https://en.wikipedia.org/wiki/Naturalistic_fallacy ].

      I am more interested in what is actual problematic with capitalism. (Such as that it needs to be constantly supervised,like democracy, which is not ideal. And it is complicated; like democracy, it sucks, but no one has come up with anything that sucks less – as Jerry already noted.)

      1. “but no one has come up with anything that sucks less – as Jerry already noted”

        Yes they have, as I already noted. It’s called “participatory economics.” Google it. It’s an actual thing by real economists. Hasn’t been tried yet. Seems like a better way. Tell me why not?

        As for “is-ought” that fallacy is a fallacy. Every ought ever was derived from what is. Unless you have an example of an ought that was not derived from what is.

        What Hume pointed out was that we do not “reason” from ought to is and he was right. Hume pointed out that our passions derive our oughts, and the only input they require is a belief about the way the world is.

        So you can not drive ought from is, unless of course you are a human with feelings, and you consider those feelings to be you, in which case, deriving ought from is is precisely what you and everyone else with feelings does every waking moment of the day.

        1. “we do not “reason” from ought to is”

          More seriously, Hume said you cannot derive an ought from an is. If he was radical in this belief, then he sanctioned total randomness and irrationality in normatives such as ethics and politics.

          I contend that Hume would was fine with that. His primary was to deny induction. The externality of that position is a denial of science (which operates through induction as well as deduction, they are yin/yang) and objective law.

          History has let Hume get away with this for too long, and in my opinion, scientists have contributed to the enabling. As well as political intellectuals.

    2. As much as I like evolutionary psychology, I’m always hesitant to ascribe to a billion people what we believe worked well for a tribe of twenty. Just sayin’.

    3. Where I live, and in some nearby countries, anti-capitalist experiments went with full force throughout half of the 20th century and led to national bankruptcy, not counting the lost lives and the environmental disasters. Therefore I’d wish, if someone wants to try something different from capitalism, to stage his experiment at least 5,000 miles away from my city of Sofia!

    4. I find your comment interesting and i am not rich. Possibly though and relatively by some, i am filthy rich.
      Not everything is measured by wealth though, health is as important, physical and cognitive health. Your ability to enjoy and pursue your fruits of labour cannot or may not be realised in whatever way you measure that.

      No one person is in control, no one person can possess all the resources.
      Using an earthquake as a metaphor (something unforeseen) and as a physical force of nature will quickly remind us of that fact, no one segment of society or persons is in control.
      The ground can move at anytime by any outside force.
      As a clearly social animal the feedback loop of giving and receiving requires cooperation and reciprocity transferable to any environment, modern, complex, or otherwise. This is a part of flourishing and well being for sentient beings, a basis for a caring society. I don’t include gullible or naive.

      In short, for me, it is progressing the enlightenment values which are the key. For example, freedom means very little if your in a closeted gated community of wealth.
      I would hazard a guess your sense of well being would not register very high either.
      Capitalism and what it affords needs a heart, whatever this system is and looks like, and i agree, it may be a redundant system in the end.

  18. The question:

    “Is there any better economic/governmental system than free-market capitalism combined with appropriate government regulations against its excesses.

    When financial services & business are the puppet masters of the politicians we have a problem – democracy is just an illusion when lobbyists control the conversation & the outcome.

    And politicians are so easily corrupted it makes my teeth grind! I remember from my university days how quickly the elected students running the Students Union [here in the UK], were corrupted by the temptation to bend the rules for personal gain: securing personal use of university transport, best accommodation for themselves & cronies, free concert/gig tickets under the guise of some supervisory role etc etc. And from there these kids realised that a life in politics is an endless gravy train.

    HERE’S A LIST OF USA’s MOST ANNOYING POLITICIANS, but I’m not just poking the US, it’s the same every bloody where from local small time politics right up to the top of national government & beyond [EU parliament & UN principally]

    I have no solutions, but I’d like to start by seeing mechanisms in place to control greed & to severely punish [short of the Chinese solution] whole divisions/departments of people for creating the conditions where something like the 2008 crash can occur. No bank or business should be so big that it can’t be allowed to fail.

      1. The solution is conceptually simple: limit the influence of money on politics. Allowing money to influence politics results in a runaway feedback loop: rich people have more influence over the government, and shape government to further enrich themselves, which increases their ability to influence government.

        These kind of feedback loops happen all the time, and often they’re labelled “corruption”. But in U.S.A. it is ingrained in the system and accepted.

        A lot of the negative connotations of capitalism are due to capitalism being conflated with money influencing government, but they’re 2 separate things. Capitalism is possible without wealth influencing (buying) government, but it’s difficult to build that firewall, especially in the context of U.S. politics.

        1. In my country, many politicians do not wait for money to be “allowed” to influence politics, they just take it “under the table” and are happy! Hence the high level of corruption, alas.

          1. If it’s outlawed, it’s called “corruption”. If it’s not outlawed, it’s just business. But it’s the same thing.

  19. 1) Many evils blamed on capitalism pre-date capitalism by a long shot!!! How can anyone blame “rape culture” (I term I’m don’t entirely like) on capitalism when it pervades a fair amount of Homer’s “Iliad”??

    2a) Perhaps there is a valid distinction between Adam Smith’s broader concept of free markets and a post-Industrial Revolution capitalism which can over concentrate wealth in the upper class.

    2b) Adam Smith seems to be a truly moral thinker in a way that Ayn Rand is not. What she advocates is really market feudalism, not capitialism.

    3) In answer to Jerry, perhaps either democratic capitalism or a kind of “market socialism” is the best system.
    Wikipedia defines “market socialism” as follows:

    Market socialism is a type of economic system involving the public, cooperative or social ownership of the means of production in the framework of a market economy. Market socialism differs from non-market socialism in that the market mechanism is utilized for the allocation of capital goods and the means of production. Depending on the specific model of market socialism, profits generated by socially owned firms (i.e. net revenue not reinvested into expanding the firm) may variously be used to directly remunerate employees, accrue to society at large as the source of public finance or be distributed amongst the population in a social dividend.

  20. I support capitalism with a safety net for the most vulnerable. Strong institutions are necessary to police corruption in the public and private sectors. Monopoly capitalism and crony capitalism are the worst extremes of capitalism, hence the need for appropriate regulations. Socialism discourages individual flair and enterprise. It is a failed system.

  21. Yuval Harari, author of “Sapiens” & “Homo Deus”, has a fairly nuanced position on this topic:

    “Dataism is the belief that the entire universe consists of data flows, and all phenomena can be understood in terms of data-processing. A tomato and a human are two different mechanisms for processing data; so are communism and capitalism. The crucial difference between communism and capitalism is that communism relies on a centralized system for processing data whereas capitalism relies on a distributed system. According to Dataism, what we usually call feelings and desires, are in fact biochemical algorithms. Feelings aren’t based on intuition or inspiration – they are based on calculation.

    Buried in this idea of “dataism” is the point that capitalism is essentially distributed data processing because we are each individually (as data processors) making our own decisions about the economy. So, while we each may fail occasionally on our own, the system usually corrects itself. Compare this to communism and socialism which are more centralized, and we see that an “error” in this system generally spells doom for the economy.

    This is an interesting perspective, and while not perfect, does a good job of describing why restrained capitalism is the best economic model we’ve discovered so far. The real task is mitigating the corruption and greed that can come about as a result of a capitalistic system, of which I think the U.S. currently does a very poor job.

    What the likes of Bernie Sanders and Elizabeth Warren are advocating for is much more akin to the type of restrained capitalism that we should be aiming for, and much less like communism that the right-wingers are warning about.

  22. ANti-Capitalist is a weasely word to criticize without actually making a stand or statement on your beliefs. It is almost always spoken by a child of comfortable to upper middle class that had the opportunity to go to a good college and major in a soft subject.

    It really seems to mean whatever they don’t like bad and what they do like is an act of rebellion even if made under capitalist conditions.

    But what I never see from the anti capitalist are demands for ownership of the means of production by workers or for a right to a job.

  23. Today is a pretty good snapshot to look at this dilemma in the U.S. with Capitalism and Government. Face book, one of the most profitable, successful businesses has been allow to do business at will. Currently one of the richest guys in the world. Now they discover flaws and just unregulated problems that have allowed all kinds of foreign influence and election tampering and who knows. Is the company out to lunch on this and do they care? What will be done about it? At the same time we have a president personally attacking another huge company, Amazon and saying they are not paying enough taxes. Talk about the kettle calling the pot. Also says Amazon is killing the post office – somehow forcing the post office to deliver Amazon boxes at a loss. Maybe we will just run this government via twitter?

  24. I think the statistics is that capitalist “free” market economies that regulate both inflation and the Gini index for resource spread correlates with functional (secure, happy) societies.

    As I believe Steve Pinker pointed out in his latest book, any society that has eliminated capitalism but has tried to be democratic—or maintained the pretense of democracy—has failed. Capitalism is, after all, a form of economic freedom.

    Good point! It should become part of the UN declaration of Human Rights (and Freedoms).

  25. I often take the capitalism side when I hear my Facebook friends denounce some or all of capitalism. They don’t really offer up alternatives except perhaps unions. I believe they just want a more friendly, accommodating world.

    My fixes to capitalism is regulation that makes it more fair and transparent. Capitalism depends on consumers that have full information about what they are buying or investing in. Very little of current regulation targets this. Healthcare is a great example. MSM often runs articles on how hard it is for consumers to navigate the system but government never seems to address it. Of course, single payer healthcare would fix this but transparency is needed in all markets.

    There needs to be a solution to income inequality but I have no idea what will work We just have to try some things. Financial services people have been raking it in for decades and don’t deserve it and generate much resentment. Technocrats who have actually created useful things are less of an issue.

    Another solution we need is for people who consume a resource should also pay for it. This is what gasoline taxes are supposed to do but everyone hates them because they don’t understand their economic benefit. If costs aren’t distributed fairly, markets are distorted and inefficient.

    1. Well, our current govt. just gave a very big tax break to the richest and the corporations in the face of a good economy with low unemployment. And because the middle class got a few crumbs, no complaint. Deficits are sky high, we can’t rebuild our infrastructure but who cares. Somehow the free market will fix it all. We spend more on the military than the next 8 or 10 richest countries in the world and have for years but apparently this is very good. What we have are the stupidest people in the world because the same people keep getting voted in. Everyone is happy.

      1. Yes, we have very bad government right now. Capitalism won’t fix that. Some things should not be “free marketed”, such as our politicians. Got to get big money out of politics before we can even begin to solve these problems.

  26. The only worked out alternative to capitalism that I’ve read about is participatory economics. The model rejects central aspects of capitalism (private ownership of productive property, hierarchical jobs, grossly unequal compensation, and market allocation) with alternatives that are more in line with humane values. For example, advocates of the model argue that having a self-managing say over one’s own work (in a cooperative setting with other workmates) is a core human right that an economy should not trample. Among the multitude of ills of capitalism, the economy functions by the obedience of workers to a minority of managers. Any system of values which rejects the master-servant relation in favor of self-management would judge capitalism intolerable. Capitalism isn’t unique in this regard, as the worker/manager split is present under central planning, social democracy, and market socialism.

    What the model rejects, it replaces with: (1) a decentralized annual planning procedure, (2) jobs that are equalized with respect to the mix of conceptual and executionary tasks that are entailed, (3) compensation on the basis of (i) amount of hours worked, (ii) work intensity, (iii) harshness of the work conditions, and (4) producers and consumers councils which arrive at decisions by democratic voting procedures. Importantly, a feasible annual plan is NOT reached by a protracted and bitter deliberative process, but by the use of quantitative measures which reveal and automatically accept “uncontroversial” economic proposals, thereby speeding up the rate at which the system converges to a feasible plan.

    I recommend recent books by Robin Hahnel on the subject, especially: “Of, by and for the people: the case for a participatory economy”.

    Unfortunately, none of this has reached public consciousness anywhere, including the Left. Of course, the ultimate worth of the proposal will be judged by whether it works well on a large scale. That is yet to be determined, but I sure hope the experiments start soon.

    1. The 2nd sentence should read: “The model [REPLACES] central aspects of capitalism (private ownership of productive property, hierarchical jobs, grossly unequal compensation, and market allocation) with alternatives that are more in line with humane values.”

  27. Social-democracy / mixed economy, with no need to repeat the many good arguments from above. I do wish the term “free market” could simply be retired. Is it as illusory as “free will?”

    1. The entry for Free Market in J is for Junk Economics: A Guide to Reality in an Age of Deception begins:

      To the classical economist, an economy free of land rent, usurious banking practices[,] and monopolies in private hands. But as finance capitalism has superseded industrial capitalism, it has inverted the “free market” rhetoric to mean a market free for rent[1] extractors to obtain land rent, natural resources, monopoly rent[,] and financial gains “free” of government taxation or regulation…. (See Free Lunch, Kleptocrats and Road to Serfdom.)

      [1] As a technical term, “rent” basically means unearned transfer payments.

  28. Capitalism is evolutionary, communism (a completely planned economy) is creationism. Like evolution, capitalism is full of deformities like that 17-foot laryngeal nerve on the giraffe, but over time they get weeded out. Now natural selection is all very well, but a bit of artificial selection, of the kind that gives us superabundant cow’s-milk and Wagu beef and a couple of hundred breeds of dog is required for fine-tuning the process. Government regulation, which is simply citizens putting a leash on their most rapacious members, is your artificial selection process.

    1. If you are proposing a gene metaphor for capitalism, I would suggest a similar gene metaphor for socialism. There would be various phenotypes resulting from the two. Natural selection would work on the phenotype.

      Communism is not really creationism: it is one of the phenotypes.

      It is not inconceivable that, at a point in time where the elements of a reliable economic model are so precisely controllable, say when the means of production are totally run by machines, that commerce is no longer necessary. It might actually be considered inefficient and primitive.
      Why would you trade when you can calculate what is needed, produce it and deliver it to where it is needed with precision.

      Free market is concerned with supply and demand. If you need 3000 per day calories to survive but you can only afford 2000, supply and demand will allow what you can economically afford or demand: that means supply through demand does not satisfy need, only economic demand.

      If an economic system can satisfy need better than demand, it is more efficient. This system cannot operate PURELY on supply and demand because it requires fine-tuning.

      At that point there may be no distinction between private and public economy. Allowing people to speculate on markets within such a finely regulated economy would be illogical since it would introduce unpredictability.
      Not a great prospect for natural selection.

  29. Another thing I wonder about is how will AI and machine labor affect capitalism, wealth creation and distribution in the near and far future.

  30. You have to ask why these attempts fail? If I didn’t see the correlation between these failures and western influence on them I would agree with you. The truth is, any attempt at another form of social organization is doomed to fail as long as the Capitalists have something to say about it. We haven’t seen socialism come to fruition for that very reason. Also, the dependence on the state to try and make it happen only creates another barrier to it’s realization. Power corrupts, and not until each individual is informed would democracy ever work. Until then we will all be pawns in the game of amassing wealth and power.

  31. The difficulty of government in a country like the US is that the size of both the land and the population allows for such heterogeneity in population and positions that consistent government principles are difficult to enact and implement.

  32. I think that ‘capitalism’ is somehow evolutionary ‘natural’. It works on ‘natural selection’ principles, and is hence kind of inevitable. Good reason to moderate -‘shackle’- it in several areas. As pointed out above: environment, health care, workplace safety, product safety, etc.
    Capitalism is like fire, very useful, but don’t let it get out of control.

  33. The safety net that you mention is effectively “socialist” insofar that anything public is socialist and anything private is capitalist. There is right wing socialism as well as right wing socialism. One of the early welfare state systems was instigated by Bismarck who was decidedly right wing and thought that instituting state aid would be a way of opposing the increased support for early Communism amongst the impoverished working class. He thought that if you could mediate the failings of Capitalism to ensure a minimal distribution of wealth, you could also increase satisfaction with the poorest social class so that they would not look for social or economic change.

    In my view, unregulated Capitalism has no intrinsic mechanism for preventing monopolies and for ensuring an adequate distribution of wealth. On the contrary, the tendency of market forces in Capitalism is to create a surplus of manpower which pushes towards unemployment and poverty for a section of society. Monopoly and large social differentials are the inevitable consequence of unregulated capitalism due to the intrinsic concentration of wealth.

    Unregulated Capitalism can only exist in a minimalist state. By definition this state has limited democratic power since democratic interventionist government is not possible in a pure Capitalist system.
    It is to be born in mind that a purely Capitalist system CANNOT be democratic.

    An unfettered Capitalist state (as proposed by Objectivists and Libertarians) has NEVER actually existed ANYWHERE. In my view it CANNOT exist because the minimalist governmental, collectivist (Law, police and army) structure necessary to supply the infrastructure of such a system is ALSO interventionist and therefore intrinsically regulatory.

    Ayn Rand describes the State as collectivist and government by a “gang”. However she cannot explain how minimalist government is supposed to be financed (obviously a minor detail in her deluded scheme of things: the cost of government may be 30% of GDP, but Rand forgets to explain how this sum is to be obtained by taxation. Taxation, for Rand is private property taken from the individual by coersion “at the point of a gun”).

    So far, pretty much ANY government has had a degree of collectivist public and individualist private enterprise. I would define the first as “socialist” and the second as “capitalist”.

    I believe that the best solution is the find the best possible equilibrium between the two, probably by the active participation of the citizen in being aware of what is going on and being actively involved in decision making.

    I believe that decisions need to be made more frequently and in relation to more specific issues, not just based on party alliances expressed every four or five years in a national vote. Issue by issue.

    1. “An unfettered Capitalist state (as proposed by Objectivists and Libertarians) has NEVER actually existed ANYWHERE.”

      Yes, this is true even if you make an allowance for the existence of military to defend the national borders and police and a court system to deter acts of violence and to enforce contracts. Libertarianism is a delusion based on selfishness and, in essence, undemocratic because if it actually should be tried anywhere the result would be rule by a few overloads and everyone else their serfs.

      1. @ Historian,

        How would freedom and market capitalism with a limited watchdog government protecting property rights lead to “rule by a few overlords?”

        Any power-seeking strongman could not use government to coerce people.

    2. “However she cannot explain how minimalist government is supposed to be financed (obviously a minor detail in her deluded scheme of things: the cost of government may be 30% of GDP, but Rand forgets to explain how this sum is to be obtained by taxation. Taxation, for Rand is private property taken from the individual by coercion “at the point of a gun”).”

      Libertarians can’t agree on what a minimalist government is. It runs from none (not possible) to single payer health care.

      Libertarians that suggest any amount of government will require funding for that amount of government. Suggestions run from fees on imports, which is just another form of taxation on the consumer or business owner, or volunteer-ism. Which is other people paying for libertarians services.
      “Hey, do you mind working for free so I don’t have to pay a single penny for government services?”

      Not to mention labor, although usually the largest, is only one part of the budget. Actual money is needed.
      At least one libertarian suggested private armies instead of a national armed forces.
      I pointed out was another way of saying mercenaries, which have a rather poor track record.

      I’ve never heard a cogent persuasive argument why one service is absolutely necessary and others are not. As I said, libertarians can’t agree. Which government services are really necessary is just a matter of opinion and subject to the will of the people including in a libertarian society (if such a thing existed).
      Which is how government services are decided now. All we are seeing is a disagreement over which ones to fund. I dismiss the “no services and no taxes” libertarians. They can’t make it work except for tiny temporary communities within a larger pre-existing government structure.

  34. On my Facebook feed (I know, I should quit) yesterday, I saw a meme that said “Capitalism: the psychopathic idea that the basic necessities of life can be privately owned and that some people are more entitled to food, water and shelter than others”. When you see something like that, how do you even respond? After all, the sentiment is noble, but it’s completely wrongheaded in terms of how the distribution of those resources has played out in pre-capitalist and non-capitalist societies.

    Perhaps you could ask “what’s the alternative?” because there really isn’t any idea that’s been as effective as markets for distribution of goods, nor has there been any where the quality of life for so many has improved. Many of the problems in society come not from having a free market, nor putting a price on the necessities, but from failures of government to act for those who either fall into or are born into hardship. Getting rid of capitalism won’t solve those problems, but changing government policy would.

  35. I feel that a big problem here is simply what people mean when they say capitalism. Most people when they say capitalism they just mean the freedom to make a profit through your own choice of endeavour, whether by operating a business or contributing your labour to another.
    Most critics refer to US style free market capitalism which has many problems, particularly those involving rent-seeking and externalization of costs. They don’t mean the same kind of capitalism which is referred to by others. Defenders of unregulated capitalism also use this lack of clarity to confuse the issue.
    Anyway, how much regulation makes it not capitalism any more? What percentage of public ownership? Would you count the very successful Chinese economy as capitalist with the amount of public ownership?
    Participatory economics does look promising – but there’s a long way to go with it still.

    As to what I think… I think the best current system is a democratic socialist model with a strong central government and managed capitalism.

    1. That’s always the hard thing to pin down, because I don’t think those criticisms are discriminatory in the diagnoses of the societal ills caused by capitalism. Because it’s getting to things like ownership and inequality, which are necessary parts of any capitalist system – highly regulated and socially thinking or otherwise.

      The venom, after all, isn’t at the lack of regulation, or the lack of public ownership, but that the idea itself is a promotion of the worst in humanity (psychopathic gets used a lot) and causes suffering through trying to profit off what should be common goods.

    2. “Anyway, how much regulation makes it not capitalism any more? What percentage of public ownership? Would you count the very successful Chinese economy as capitalist with the amount of public ownership?”

      I think the word capitalist should be used as an adjective describing the privately owned trade occurring in an economy, not to describe the actual system itself. Since the regulatory (non-capitalist) element also exists in any system, no economy could really be described as Capitalist without further qualification:
      gives umpteen types of Capitalism.

      Interestingly it doesn’t include the example you queried: the Communist/Capitalist model of China, which in theory should not really be even possible. I presume that the Chinese private sector is now massive. Many Chinese have bought expensive properties everywhere abroad which I am sure are privately owned. It is not really possible to define such a system as Communist. Its becoming a form of bureaucratically regulated oligarchy. I think that, at a certain point, the Chinese state will place stricter limits on its “free” trade. At the moment it is not to its own economic advantage to do so. I would say that China is now a capitalist state in any case. It can transform reasonably easily into a democratic mixed economy or even a right wing dictatorship with massive economic and military power.

      1. China defines itself as Socialist however, and large companies are to some extent influenced by the Party, which by some definitions, equates to socialisation of the means of production. I don’t think Jack Ma would be very successful if he spent a lot of time criticising his government.
        The state doesn’t have to own everything, nor are state owned entities necessarily ‘nationalised’ (The Bank of England, and the Netherlands National Railways, to name 2 examples are 100% state owned but not nationalised).

        At the end of the day its semantics + prejudice. China has been very successfully over the last 30 years, whether you put that down to socialism or capitalism is likely to reflect your political views.
        Its undoubtedly a mixed economy, but then socialism doesn’t per se preclude that.

        At least we can agree that China doesn’t have the most ideal mixed economy 🙂
        Though its probably better than the USSR under Lenin’s New Economic Policy, which allowed some sectors to operate under free market conditions, and actively sought foreign investment.

  36. I think it’s worth adding the alternative to capitalism is going to be a necessity soon because capitalism requires at least some minimal degree of scarcity of goods to function reasonably well. In the near future (less than a century anyway, possibly sooner, barring massive disasters) automation and energy production will progress to the point where the only reason for any kind of scarcity will be lack of willingness to share.

  37. “But I ask those of you who are constantly harping on capitalism. . . .”

    Well, I don’t fit that description, but given our host’s views on free speech I assume I’m allowed to answer.

    In fact, I would say that the principle underlying a free market should be the same one that applies to free speech—that we should allow as wide a range of practices as possible short of those that cause direct harm to others. Of the regulatory measures mentioned, the one that most clearly fits that bill is “the purveying of misrepresented or dangerous products,” since these cause direct harm. Second might be “unethical business practices”—for the same reason. As for “government medical care” and a “variety of social services,” these are progressive (not to say “utopian”) measures to improve society and don’t meet the above criterion.

    In other words, I think the role of government should be that of a referee preventing foul play in the conflicting pursuits of happiness rather than that of a coach promoting or enabling one or another outcome. Clearly, this is a “conservative” point of view (in the classical tradition of Burke and Oakeshott), one that I doubt many here are going to agree with.

    1. Certain important services do not work well in a free market. I’m thinking police, jails, care for those left behind by circumstance, and, probably, health care. I am totally behind capitalism but it can’t be expected to do everything for a society. It is simple. Capitalism’s only goal is to make profit. Society has more goals than just profit.

  38. “Is there any better economic/governmental system than free-market capitalism combined with appropriate government regulations against its excesses?” it’s a trick question. It assumes that “appropriate government regulations against its excesses” can be put in place and capitalism would still be capitalism. First, you’d have to demonstrate that assumption. That should be enough to stop the debate emerging from the question until such demonstration is produced, but let’s not do that.

    Second, not in the question but in the general discussion, it’s implied that a system like capitalism can be evaluated by it’s impact in a single country, whether it’s Norway or the United States, when clearly it’s a system that operates and has consequences (good and bad) worldwide (I’m not saying that other systems like Communism don’t operate that way, I’m just saying that Capitalism does). So, from this point of view, what’s wrong with capitalism? Well, maybe we could talk about two world wars and many colonialist wars before them, the chronic state of politics in Latin America at least until the second half of the XX century if not later… and I’m sure we could find more examples. That’s a matter to settle too, the scope of the evaluation.


    I don’t have actual evidence for it, but I sense and I agree that the world is better now than when WW II ended and that, as political systems go, rise and expansion of “capitalism” has accompanied it. But what I see is that this betterment has been done adding government (and not government) regulations, son in fact this betterment has been done not based on the expansion of capitalism, but on its shrinking. That tells me then, that less and less capitalism is better.

    Where would the limit be? 50% capitalism only? 0%? It’s plausible to think that there’s a limit between 100 and 0 that, beyond it, worsens things instead of bettering, but as far as I can see, there’s no way to tell it can’t be 0.

  39. “Capitalism is, after all, a form of economic freedom.”

    I was asked by the author to review a book about Marx and Marxism.

    I said that the book did not address adequately the labour theory of value as a key component of the failure of Marxism as the basis for an alternative economic system to capitalism.

    My reason would have been obvious to anyone who has read Adam Smith.

    Markets, even those far from perfect, generate price signals that drive production and thus investment. Price signals sent by consumers are in a sense a form of free expression, the basis for economic freedom.

    The labour theory of value requires bureaucrats who rely on theoretical calculations to advise politicians on what prices to set.

    Soviet shops were famous for empty shelves precisely because the production system did not rely on markets and thus did not get feedback from consumers.

  40. I made this point on Twitter about this same question:

    All over the world, those who have a choice (i.e. living in democracies) consistently vote for(parties that support) regulated capatalist systems.

    Any countries I’m aware of that run different systems also “dissuade” (ahem) their populations from expressing their true feelings on this subject.

    Even if that doesn’t convince you it should at least give you pause and food for thought.

  41. <>

    If you have appropiate regulations, then by definition you can’t have free-market. And I don’t think regulations are a bad thing, that’s why capitalism brings so much inequality and its a cruel system.

  42. Imagine a dry rationalist saying:

    1. We need enough of a market to know what people want.

    2. We need a public system of social security to take care of minimum needs.

    3. Some means of production work logically better under government control, some co-operatively, some by private ownership.

  43. Well, yes, those regulations need to confine the core of capitalism which is based upon unending economic growth, and nothing we have ever seen does that. Is capitalism capable of being restrained? I do not see that it can be.

    Basically, individual and collective actors are allowed to seek riches through growth of anything. But finite resources do not support infinite growth. We also have the problem that all biological species expand their population up to the limits of its food supply and capitalism supports unlimited expansion of food supplies and hence unlimited expansion of population which supports unlimited demand for economic growth (at the minimum to support the expanded population). So, capitalism supplies both the demand and the supply.

    Currently studies show that the financial services “industry” exerts a net negative effect on modern economies, yet we still support it, even subsidize it. Why? Because to the greed rampant in our capitalistic system, greed which is woven into the system.

    What we will replace capitalism with is beyond me, but we had better figure it out soon as time is running out. We could start with better regulation, such as a dismantling of our financial services institutions. And no I do not care about what good they might do, they are a net negative drag on the rest of us, all to just encourage greed. If businesses want to expand, have them get a bank loan for Pete’s sake.

  44. I can not see how anyone who understands Evolution could ever take exception to the capitalistic system … given that it is fundamentally structured on Darwinian principals. First there is COMPETITION leading to the demand for companies to improve their “fitness” (improve their product cost benefits and their adaptiveness to market forces) to “stay alive”. Second there is the fundamental acquisitive nature of all organisms to survive for themselves and for their kin. Finally there is the benefits of cooperative evolutionary strategies seen in the formation of a stockholding population. No alternative system caters for these fundamental evolutionary drives. The mix of Capitalism with democracy in itself helps to regulate behaviours which in Evolutionary Game theoretic terms are more dangerous gross Defector strategies which seem to arise in systems such as communism. But even in socialist economies e.g. Vietnam or China a capitalistic entrepreneurial system really thrives and improves the lot of the general population.

    1. ‘I can not see how anyone who understands Evolution could ever take exception to the capitalistic system … given that it is fundamentally structured on Darwinian principals.’

      I think you mean ‘principles,’ but let that pass. Here’s how I ‘take exception’ to the notion of capitalism you describe:

      Social Darwinism isn’t Darwinism.

      Corporations aren’t human persons, except in the etiolated sense wrongly instituted by the U. S. Supreme Court.

      Homo sapiens is by nature (Darwinian, biological, sociocultural) a social animal; competition may be a necessary condition for understanding ourselves, but it is by no means sufficient.

      Altruism (individual) and cooperation (group) are as real as Hobbesian war, work better for general well-being, and, if one accepts Pinker’s evidence, continue their long process of bettering humanity in a gradual but undeniable way.

      While I own shares in companies that own shares, I do not confuse this with Darwinian evolution. Mutual funds an emergent property of biological evolution? Don’t think so. Yes, the result of such ownership helps me ‘survive’ in retirement but along the way of life has had nothing to do with procreation and the transfer of my genetic fraction to another generation. And if my society sanctioned a different way of well-being that worked and was fairer to all, I’d be happy to endorse and follow its paths.

      Socialism has worked, is working and will work. Democratic socialism, allowing private property and lightly regulated trade. Socialism such as U. S. citizens rely on for their quality of life: Social Security and Medicaid/Medicare, for example. We need more democracy and less market, when ‘market’ comes to stand for the unbridled accumulation of wealth by a few human persons who think they pilot an inhuman person.

      ‘Things are in the saddle, and ride mankind.’

      1. Even though capitalism is a mechanism with evolving entities, no one here is confusing it with biological evolution, if I may be so bold as to speak for all. We can and should take advantage of evolution, as capitalism surely does, but we’re also able to create systems that constrain it and modify the environment in which it operates – a sort of directed evolution.

      2. And where did I refer to Social Darwinism exactly? I spoke of FUNDAMENTAL properties of Evolution – Competition, survival of the fittest, adaption, the primacy of the individual as the fundamental unit of selection (i.e. natural “selfishness” in motivating survival strategies), the effects of kin selection on acquisition of resources for survival, co-operation as a successful strategy… do not try to tar my arguments with the taint of Social Darwinism. Isn’t it significant that the one area that has most taken Evolutionary Game Theory onboard to successful model functionality is the field of Economics? I am not claiming that in human economic behaviour that second or third order effects are not at play, but I categorically state that at the fundamental level our economic behaviour is Darwinian. Hence the most effective implementation of our nature is to harness these principLE effects…. i.e. adoption of Capitalism. But I never said that some general restraints be put in place on a capitalistic system… this is nothing more than modifying game rules to effect cooperative payoffs.

        1. Since you’re keen to view political economy in naturalistic Darwinian terms, I’ll play along. See Parasite in J is for Junk Economics: A Guide to Reality in an Age of Deception, and then some of its associated non-Darwinian entries: Free Luncher, Zero-Sum Activity, FIRE Sector (Finance, Insurance, and Real Estate), Compound Interest, and Oligarchy.

          1. ” Since you’re keen to view political economy in naturalistic Darwinian terms, I’ll play along. See Parasite in J is for Junk Economics”

            Amusing reading if one likes to mix their specific political biases, their attraction to conspiracy theory and the subject of economics all together, but nothing much to do with the basic drivers of human economic behaviour which is what I have been talking about here. On one subject however I must agree with Hudson in his analysis of the treatment of Greece by the EU, but this is more an example of shoddy politics than it is of economics.

            1. Today’s “Economics” used to be called “Political Economy”, in recognition that economic conclusions affect political policy. The main conspiracy discussed in Hudson’s book is that today’s bloodless apolitical “Economics” discipline is that way for a reason, mainly that it avoids mentioning that conclusions differing from the current Monetarist ones are possible, and thus different political policies are possible.

              In Hudson’s favour is that he takes into account facts that Monetarist Economics ignores, such as the difference between earned and unearned income, and the problem of lopsided (99%/1%) distribution.

              1. “Today’s “Economics” used to be called “Political Economy”, in recognition that economic conclusions affect political policy.”

                Yes, I quite agree. Economics and politics are quite entwined. Except that I would put it the other way around – that political policy affects the economics. I go along with what many posters here have already said, that in a democratic system we SHOULD expect to see political power regulating excesses in the economic sphere. After all, in a democratic system the power to change economic policy ultimately rests with people at large, and people, for reasons of simple self interest, would seek a reasonably equitable distribution of wealth. It happens sometimes, but isn’t always the case.

                For my sins I spent the later part of my career in very senior management positions. As a matter of course I ended up being on a number of Board level Remuneration Committees that set executive wage structure. The underlying structure of investment of course is that things should be done primarily in the interests of shareholders – they held the “political power”. But the intermediaries that supposedly looked after shareholder interests – the investment funds and their assigned representatives, were profligate with executive pay structures. It was totally unnecessary, irrational and contrary to shareholder interest. I could never make sense of it nor convince anyone that it was totally unnecessary. More strangely, shareholder rebellion against this behaviour never occurred.
                Yes – I remain a true believer in Darwinian influences at the base of all economic systems and capitalism most effectively harnesses these basic economic human motivations. But there is to be no certainty in expecting rationality in the way “the game is played”. Perhaps that is why economists find Evolutionary Game Theory more effective in modeling economic behaviour that Game Theory itself. Evolutionary Game Theory assumes the players are not rational.

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