Hi all,
I’m seeing a lot of hate for capitalism here, and I’m wondering why that is and what the rationale behind it is. I’m pretty pro-capitalism myself, so I want to see the logic on the other side of the fence.
If this isn’t the right forum for a political/economic discussion-- I’m happy to take this somewhere else.
Cheers!
Apple recently entered banking. So…
Not banking but transfer proxy space.
Yeah, and if they serve the needs of customers better, then they’ll be given encouragement (money). If they don’t, they’ll be given discouragement (they lose their investments). Seems like a good system, no?
Of course, corruption and regulatory capture subvert this system and are bad for everyone, but those are subversions of capitalism.
Are they really subversions? A pure capitalist society is determined purely by incentives and the rules of economy (supply and demand and such). If it’s in a business’s best interest to do something unethical, they will do it. They will band together to price fix, they’ll collaborate to pay workers the bare minimum, they’ll create monopolys and duopolies to get the most money possible, because in a capitalist society, money is the #1 incentive. Government regulations are anti-capitalist policies to prevent these things from happening - although maybe not as effectively as they should be, given how things are.
Capitalism is defined as a set of rules/regulations that allows people to own the capital that they produce. Regulatory capture is when an organization gains control of the regulations to subvert other people’s ability to own their capital. This is why I say that the more regulatory capture that happens, the less capitalist the system.
And yes! Capitalist systems heavily incentivize caring about money and nothing else. But the system also makes it so that when people act purely selfishly for money, that it results in good outcomes for everyone. That’s why I think it’s a good system.
For example, if organizations price-fix, it heavily encourages a third party to undercut them. If they try to prevent the third party by legal means, then that’s not capitalism.
Nobody should take you seriously.
Boy, if their statement were true, we’d be living in paradise!
Isn’t the prisoner’s dilemma the exact opposite of this claim
The prisoner’s dilemma is a mathematical example to introduce students to different models where cooperation and competition have different outcomes. You can also design game theory systems where competition is generally a prefered action. The actual question is which model better reflects our contemporary realities, but regardless, there are great arguments to claim that cooperation is better most of the time if we assume that the participating actors are aware, intelligent and capable of taking free decisions.
Just chiming in to say that if organizations price fix, it’s pretty rare a 3rd party can sustainably undercut them. The price fixers can agree to drop prices way lower, sell at a loss until the 3rd party is forced to price fix too or go out of business, and then resume the fixed price
So the outcome from a customer’s perspective is that the price fixers have dropped their prices way lower? That’s good, no?
And then once the 3rd party goes out of business and they resume their high price… they’re encouraging a new 3rd party to try again. So the prices lower again.
Meaning there’s pressure on prices to be lower, which is what we want. Therefore, good system.
Of course, I’m not saying it’s ideal. But is there a better system?
Why would 3rd party #2 even try if they just saw 3rd party #1 just get stomped in that way? Why would you start a business, a very expensive endeavour (monetarily, mentally, and temporally), if you knew how and why it would get driven out of business pretty quickly? In the scenario you describe, the pressure is for prices to be higher on average, with dips here and there.
What you’re talking about is a tendency towards monopoly.
The most efficient way to organize industrial capacity is in large centralized productive systems, because it gets the per unit cost low. These ‘economies of scale’ are the best way to offer the lowest prices to the consumer for industrial goods by far.
The problem arises because this creates a centralized power structure. We call the people who control this power structure capitalists. The capitalists use this structure to force unfair labor contracts on their workforce.
The ‘better solution’ is democratic oversight over the centralized productive apparatus. Which can be in the form of regulations from democratic institutions on the centralized productive apparatus; or just as well workers collectively owning the company they work for.
Matt Bruenig has a some really informative videos on how that might look.
https://youtu.be/MmeIGcI60oc
Here is an alternative Piped link(s): https://piped.video/MmeIGcI60oc
Piped is a privacy-respecting open-source alternative frontend to YouTube.
I’m open-source, check me out at GitHub.
For most purchases, people really only have vanishingly few choices of companies to buy from. A truly free market might work, but the profit motives that have corrupted our political, legal and regulatory systems has made most markets into oligopolies. These companies work together to manipulate prices, without ever directly communicating in a way that can be punished.
For a free market to really drive prices down there needs to be real competition. When eggs went up in price, they allegedly did so because of avian flu. But that flu only affected a small amount of the production. Cal-Maine, the largest egg producer in the country, lost no egg production at all. Yet they increased their prices massively. If the market was working as you say it does, Cal-Maine would have kept their prices low to capture more market share. Instead they saw that other producer might have to raise prices and preemptively raised their prices.
Purchases such as…? Because basically all the things I purchase I have pretty solid options for, especially when you consider that a lot of good are interchangeable with each other.
small number of mega corps owns nearly all brands.
https://i.imgur.com/j6zvm7S.jpeg
This pic is old btw they ve moved on. It doesnt show all the brands they own.
Good outcomes for everyone by acting selfishly? Oh boy! Let me tell you about the distant past of 2008 when selfish/greedy actions could have crippled the entire world economy but instead governments bailed out the selfish/greedy corporations and left all non-corporation people affected to flap in the wind.
And that’s skipping over the COVID-19 capitalism fuckery, dot com bubble, healthcare, housing in 2020’s etc.
Capitalism is a cancer and it is literally killing people for the sake of money. But here’s a $1 so just forget about all those useless bad things.
Why do you think this??
Look at all the constant environmental disasters and harmful products that happen because corporations did the math and determined that paying a few million to lawsuits every once in a while is cheaper than being more careful. “Voting with your wallet” does not work because the big corporations undercut the competition and bombard us with advertising to ensure they will win no matter what.
Hell, most of us are on here because Reddit started doing scummy things in the name of money, and we’re a tiny fraction of their userbase; Reddit is still unfortunately doing pretty much fine. Is that the best outcome for everyone?
And don’t forget that there are a lot of regulations passed in the last hundred years that were necessary because corporations were doing stuff like dumping so many chemicals into our waterways that rivers would constantly catch fire. This is what happens with unfettered capitalism.
No, that is not the definition of capitalism. Where did you even hear that? So, in your vision of capitalism, the board of directors gets no money ever, because they produce nothing. The capital they have is produced by laborers.
You’re forgetting economies of scale. Let’s take phone plans. A few giant companies have infrastructure (cell towers) built across the country. Coverage is extremely important - a phone plan with coverage in a small area isn’t anything anyone will want. How is a third party supposed to compete? They’d need enough money to set up nation-wide infrastructure, contracts with phone manufacturers to make sure phones are compatable, and they need to do all that before they even sell anything. Even if you try to compete, how do you make your prices competitive after spending that huge amount of money?
Either you’re a dedicated troll or an absolute rube.
He’s a mid-western rube living a padded life in the heartland of the empire.
You probably won’t see this, but I hope you will amend your definition of capitalism:
You know this, right? We all know a trust fund baby is perfectly capable of using the wealth they were born into to buy a factory, mine, apartment complex, or shares in all of the above. (Hence profiting off of value they did NOT produce.) We all know capitalism does not distinguish in any way whatsoever between this form of capital ownership and the self-made variety.
“Capital they produce” and “capital they acquire / inherit / use stolen money to purchase” can both be wielded the exact same way. That’s the point of capitalism.
And this is only half of why, “that they produce” doesn’t work in this definition. The other half is that it contradicts the definition of “capital.”
Capital is literally “any form of property that can be used to collect the value of other people’s labor.” That is the opposite of “ownership over the things you produce.”
The exact opposite.
To “own the capital you produce” one must personally build the means of production. Otherwise, the owner is owning the capital someone else produced.
And you’ll find the vast, vast, vast majority of almost every form of capital (patents, copyrights, factories, burger machines, server computers, office buildings, mines, mine equipment, oil rigs, oil tankers, power plants, land, the list goes on) does not belong to the people who turned the screws, drew up the plans, welded the seams, mined the materials, performed the research, wrote the movie script, poured the cement, or otherwise PRODUCED the capital.
It belongs instead to the people who funded it. The people who, under capitalism, own it.
Anti-capitalists are not against people owning what they produce. In fact, in America, there is a distinctly anti-capitalist business model that thrives in numerous cities called a “cooperative” (co-op for short) that is owned by either (a) customers, or (b) workers. And a worker co-op is literally workers “owning what they produce”, but is considered market socialism by anyone who cares about using words correctly.
I would love if co-ops replaced corporations. Any anti-capitalist would. Even Maoists would tell you, “a society full of co-ops would be wonderful. The only reason I don’t find that sufficient is because capitalists would use violence to crush co-ops just as they have used violence to crush governments that didn’t favor US corporations.”
All anti-capitalists want people to be able to own what they produce. The system that robs people of their control over what they produce is exactly what anti-capitalists have been struggling to overthrow.
(Aside: many anti-capitalists support a “corporate death sentence” where any company that commits a crime causing more damage than it can afford to repair can have its assets seized and turned into a cooperative and given to its workers. This allows a company deemed “too big to fail, because too many workers would lose their jobs” to be kept running and keep its workers employed while also punishing the people whose decisions caused the damage. The investors would lose their shares, and the CEO elected by the investors would lose their job and their shares. Everyone else would be fine.)
Main point: I think before asking,
You need to first ask,
If the goal is profit, then using any means available to increase profit is the promoted method. This includes creating barriers to enter into competition. This could be things like temporarily selling at a loss until your competition runs out of money. It could also be using your money to influence politics to get laws in place that make it harder for others to compete with you. It could also be many other methods.
It also means increasing profits through other means, such as cooperating with other companies to not compete (this is called a trust, and it’s supposed to be illegal, but we all know it isn’t always, for example the oil industry). If they all agree to not lower prices to compete with each other then they all make more money at the expense of the consumer. Obviously this is bad, which is why most capitalist countries are supposed to prevent this by law (so, obviously capitalism isn’t that great alone), with limited results.
Capitalism also assumes perfectly rational actors in order to have good outcomes. Anyone who’s interacted with another person knows this isn’t possible. Without perfectly rational actors, the “best” outcomes are not guaranteed. There are far too many ways to obfuscate information and manipulate people. For example, in the case of a trust forming the consumer likely has no way to recognize that in order to work for their own interest over the interest of the companies trying to screw them over.
Basically, capitalism leading to ideal outcomes is a fairytale told by capitalists to ensure they aren’t questioned. They tell you that it’d your fault if you don’t get the best outcomes, but this isn’t true. They know it isn’t true, but it’s in their favor. They use their influence to make sure the fairytale stays intact though. Capitalism is the newest large religion. It asks for faith, takes your money, and provides you with nothing.