How would you improve our economy system?

[Seattle]

It's about both, of course.

If the CEO of a company has an opportunity to get more (money, profit, market share, competitive advantage) he takes it, because if he doesn't, he gets voted out by shareholders who want more. That's how capitalism works. Everyone wants more.

In the words of the mythical Gordon Gecko: Greed is good. Greed is right. Greed works.

That's a movie, yes. Capitalism is about efficiency. You can focus on your interests and everyone else can do the same and competition will drive price down to the marginal cost...efficiency. To evaluate capitalism compare it to the alternatives.

 

[Jeeves]

To evaluate capitalism compare it to the alternatives

Which are to be found - where?

 

[Seattle]

Which are to be found - where?

Exactly...

You could try the Tiassa system.

 

[Jeeves]

You could try the Tiassa system.

We could try several systems. And will, once capitalism implodes. But right now, capitalism rules the world: it's the best system that exists and the worst system that exists - there is nothing to compare.
For the time being, all we can do is mitigate its most negative effects.

 

[parmalee]

We could try several systems. And will, once capitalism implodes. But right now, capitalism rules the world: it's the best system that exists and the worst system that exists - there is nothing to compare.
For the time being, all we can do is mitigate its most negative effects.

I think the rampant anti-intellectualism characteristic of late capitalism is in many respects more insidious even than the concentration of capital and escalating inequality--like the trends in education, from primary to post-secondary, to shift focus towards STEMs almost to the point of wholly excluding liberal arts components. For decades now, universities have either been conflating tangentially related disciplines into single departments, or dropping certain disciplines altogether. Change and progress become virtually impossible when younger and future generations lack the very imaginative capacity to even conceive something other in the first place.

 

[Jeeves]

Change and progress become virtually impossible when younger and future generations lack the very imaginative capacity to even conceive something other in the first place.

Don't underestimate the young! Parted from their cellphone for half an hour, most of them are quite viable human beings. I mostly meet them at work - theirs, not mine. The work most (either while still in school or soon after leaving) can get are low-pay, low-status service jobs. And they do these things they never really wanted to do, conscientiously, competently and with good cheer. They have imagination; they have smarts - they just need a chance to grow.

I could be biased because the kids I see live in a small city in Canada. Maybe our education system hasn't lost so much to political and religious (same thing) pressure... maybe. But, never mind. They'll have to live in a different world from the one I lived in, and probably yours, too. They'll have to figure out how to cope with it, and I'm not sure schooling would help.

 

[candy]

I would improve the system with better consumer protection legislation.
Empower the consumer and the rest takes care of itself.

 

[billvon]

That's a movie, yes. Capitalism is about efficiency.

Not at all. Capitalism is about making more money. If you can REDUCE the efficiency of your business and make more money, you will do it in a capitalist society. In fact, your shareholders will demand it.

Enron is a great example; several of their traders actually came out and said this openly. When fires were threatening power lines, and generation had to be curtailed (thus driving up prices) one Enron trader replied "Burn, baby, burn. That's a beautiful thing!" When a power plant needed maintenance (but it could be deferred until after the expected daily peak occurred) the conversation that ensued was:

"If you took down the [power plant], how long would it take to get it back up?"
"Oh, it's not something you want to just be turning on and off every hour. Let's put it that way."
"Well, why don't you just go ahead and shut her down."

The power plant went offline and stayed offline for the peak, power prices skyrocketed, blackouts ensued - and Enron pocketed billions.

That's an example of a company that actually goes out of its way to make itself less efficient, and actually cause problems in their markets (blackouts) in order to make $$. And this would happen every single day without regulation.

 

[Seattle]

Not at all. Capitalism is about making more money. If you can REDUCE the efficiency of your business and make more money, you will do it in a capitalist society. In fact, your shareholders will demand it.

Enron is a great example; several of their traders actually came out and said this openly. When fires were threatening power lines, and generation had to be curtailed (thus driving up prices) one Enron trader replied "Burn, baby, burn. That's a beautiful thing!" When a power plant needed maintenance (but it could be deferred until after the expected daily peak occurred) the conversation that ensued was:

"If you took down the [power plant], how long would it take to get it back up?"
"Oh, it's not something you want to just be turning on and off every hour. Let's put it that way."
"Well, why don't you just go ahead and shut her down."

The power plant went offline and stayed offline for the peak, power prices skyrocketed, blackouts ensued - and Enron pocketed billions.

That's an example of a company that actually goes out of its way to make itself less efficient, and actually cause problems in their markets (blackouts) in order to make $$. And this would happen every single day without regulation.

No one is arguing for no regulation.

Capitalism is an efficient way to allocate scarce resources. The market does it automatically. That's its strength. Enron isn't "capitalism".

 

[Jeeves]

Capitalism is an efficient way to allocate scarce resources.

From one POV. Get there first, subdue the natives - better yet, get your government to do it on working people's taxes and their sons' lives - grab some land and start the slaves digging for gold. Keep it all and scatter just enough crumbs for the workforce to survive. That's pretty much the success story of South Africa.
'Allocate' is a very odd word for 'appropriate'.

Enron isn't "capitalism".

It's an awfully cute poster boy for capitalism!

 

[Seattle]

From one POV. Get there first, subdue the natives - better yet, get your government to do it on working people's taxes and their sons' lives - grab some land and start the slaves digging for gold. Keep it all and scatter just enough crumbs for the workforce to survive. That's pretty much the success story of South Africa.
'Allocate' is a very odd word for 'appropriate'.

It's an awfully cute poster boy for capitalism!

You aren't describing capitalism when you talk about colonization.
Enron was about corruption. Do you think central planning is without corruption?

No system is perfect or without rogues. That's not much of an argument against capitalism. Some seem to take everything that they don't like and lump it in with "capitalism". There is no logic to that.

 

[Seattle]

What would most of you prefer, paying a cashier in a grocery store substantially more (to make sure it's a livable wage) or to use self-checkout and end up with lower grocery prices?

You can stand there and do nothing and talk about "do you have any plans, that chicken looks good, it's sunny today isn't it". Or you can not stand in line, scan and bag your items and leave after swiping your debit card?

 

[Jeeves]

You aren't describing capitalism when you talk about colonization.

I wasn't talking about colonization. I was talking about efficient allocation of scarce resources. The same thing happens under democratic systems if the regulations are not strong enough, and in compromised (corrupt) democracies, it's simply BAU.

Do you think central planning is without corruption?

No. And you know what corrupts it? The profit motive.

What would most of you prefer, paying a cashier in a grocery store substantially more (to make sure it's a livable wage) or to use self-checkout and end up with lower grocery prices?

Invariably the former. The prices at the self checkout are exactly the same as at any cashier: the management just gets unpaid work out of the customer, thus effectively raising grocery prices while lowering their overhead.
And I'm not alone. Some stores that invested in the technology are having second thoughts. Maybe not so efficient after all.

 

[Seattle]

I wasn't talking about colonization. I was talking about efficient allocation of scarce resources. The same thing happens under democratic systems if the regulations are not strong enough, and in compromised (corrupt) democracies, it's simply BAU.

No. And you know what corrupts it? The profit motive.

Invariably the former. The prices at the self checkout are exactly the same as at any cashier: the management just gets unpaid work out of the customer, thus effectively raising grocery prices while lowering their overhead.
And I'm not alone. Some stores that invested in the technology are having second thoughts. Maybe not so efficient after all.

Central planning doesn't involve profit so how can that corrupt it?

 

[billvon]

Capitalism is an efficient way to allocate scarce resources. The market does it automatically.

In a well regulated market - yes.

Unfortunately, pure capitalism gives you Enron, the Standard Oil Company, the Triangle Shirtwaist Company, Bhopal, the Deepwater Horizon, the Exxon Valdez etc.

Enron isn't "capitalism".

It absolutely is. It is pure, unregulated, unadulterated capitalism. Maximize the returns for the owners no matter what. It is a poster boy for why pure capitalism is so toxic. The reason it's worked as well for us as it has is that we have been able to (mostly) regulate it.

 

[LaurieAG]

For a start things like depreciation should only be taken off profits before the calculation of tax if the depreciated amount is placed in something like a sinking fund designed to replace the depreciating asset in the future.

So many businesses these days just seem to operate by siphoning the grease out of the bearings of the 'wheels of industry' instead of running the bloody machine to make a profit. Parasites and crony capitalists.

 

[Seattle]

In a well regulated market - yes.

Unfortunately, pure capitalism gives you Enron, the Standard Oil Company, the Triangle Shirtwaist Company, Bhopal, the Deepwater Horizon, the Exxon Valdez etc.



It absolutely is. It is pure, unregulated, unadulterated capitalism. Maximize the returns for the owners no matter what. It is a poster boy for why pure capitalism is so toxic. The reason it's worked as well for us as it has is that we have been able to (mostly) regulate it.

No one is arguing for "pure unregulated capitalism".

Central planning doesn't work either. In our economy we have 1/3 government sector and 2/3 private sector. That seems about right to me.

Keep in mind that "well regulated" should be that it is regulated where needed and also that the regulation is "well" done. It often isn't.

 

[Seattle]

For a start things like depreciation should only be taken off profits before the calculation of tax if the depreciated amount is placed in something like a sinking fund designed to replace the depreciating asset in the future.

So many businesses these days just seem to operate by siphoning the grease out of the bearings of the 'wheels of industry' instead of running the bloody machine to make a profit. Parasites and crony capitalists.

Is that the way it seems?

 

[billvon]

Central planning doesn't work either. In our economy we have 1/3 government sector and 2/3 private sector. That seems about right to me.

What we have - a hybrid of the two - seems to work well.

 

[Jeeves]

Central planning doesn't involve profit so how can that corrupt it?

The principle of central planning doesn't involve profit. The practice does. Like the CEO on whom so very much of the success of the enterprise depend, rather than on the workers, the Commissar of Transport entitles himself to a larger share of railway fares than the engineer and conductor. (Some animals are more equal than others.) Where value is measured in money, money corrupts.

So, if every example of wasteful, unfair, inefficient and corrupt business is an exception (That's not capitalism!), can you show us any examples of the typical, or proper capitalist in action?