Capitalism and Communism

Hmm. Let's see. These are films made at the height of the Xenophobic and McCarthyite atrocities in the US, right?

I thought so. Now where's that thread with the link to all the Catholic anti-Communist comics?

stiglitz book 'freefall' would be an interesting read...

Nobel Prize winner Joseph E. Stiglitz explains the current financial crisis—and the coming global economic order. The current global financial crisis carries a “made-in-America” label. In this forthright and incisive book, Nobel Laureate Joseph E. Stiglitz explains how America exported bad economics, bad policies, and bad behavior to the rest of the world, only to cobble together a haphazard and ineffective response when the markets finally seized up. Drawing on his academic expertise, his years spent shaping policy in the Clinton administration and at the World Bank, and his more recent role as head of a UN commission charged with reforming the global financial system, Stiglitz outlines a way forward building on ideas that he has championed his entire career: restoring the balance between markets and government, addressing the inequalities of the global financial system, and demanding more good ideas (and less ideology) from economists.

doug, thanks for sharing this link with stiglitzs comments...

If Stiglitz is saying we aren't living in a capitalist economy, he's wrong.  We still have capitalism.  The overall system is exactly the same as it was before the bailouts, and the state working in the interests of capitalists is not a new thing.

Crises, recessions and depressions are also a part of capitalism, and they're nothing new either.  There were also many depressions before 1929, I mean, just look at how familiar the Panic of 1837 sounds.

if true, that's more of a reflection on market reforms in China post-Mao than it is on the US.

But, the general point is that despite repeated crises, recessions, depressions and bailouts, the general class structure of the economy is still the same as it was in 2007, 1967, 1937, 1927, or 1867 when a guy named Marx wrote a book about it.

A large part of the US economy has nothing to do with free market capitalism. And that's true of very many western world economies. China's is a state interventionist government and showing no signs of letup, which also has nothing to do with laissez-faire capitalism. China still has state-owned central banking, state-owned construction and investment banks, and maintains state ownership in several key sectors of its economy. They are neither socialist nor capitalist in any pure sense of those terms.

Self-regulating, self-equilibrating  market ideology is more mythology than real world. Capitalists and their politicians today pay lip service to market ideology in ths same way wealthy Romans only feigned belief in a pantheon of gods that were allegedly responsible for Roman successes in their various exploits. What we  have today is a kind of globalized neofeudal-colonialism, predatory capitalism, imperialism etc. But what drives our economies has nothing to do with laissez-faire or even unregulated markets. Political conservatives themselves were without their own economic manifesto after 1929 and have since adopted economic liberalism as their own ideology. And if we mix liberal economics and political conservatism or vice versa in any combination of neo-liberalism and neo-conservatism, it's nothing. Capitalism devours itself always. Imperialism was replaced with feudalism, then colonialism, and finally predatory capitalism but not laissez-faire capitalism or free market capitalism - those were fleeting ideas that existed for no longer than 30 year time frames after which their real world implementations collapsed.

Capitalism doesn't really exist.

If we're having beers with the guys, then it's okay to call the existing system 'capitalism'. Most beer buddies will be none the wiser and be mostly to entirely uninterested in theoretical nuances. But if we're beering with Stiglitz or someone like Michael Hudson, then it might be best to do more listening than talking on the subject of economic theory. Because those two guys will tend to want to point out real differences between laissez-faire capitalism and what it is we have today. Marx and Lenin would not recognize "this", what we have today at first glance. They would prolly say something like,  WTF?

genstrike, not to be bogged down in descriptions of capitalism, but i do think their is a vacuum left from the end of the ussr which has created a different mood globally.. initially it might have been perceived a few ways, but at this point i do think many people are much more skeptical of the idea of capitalism in its present form as practiced in the usa specifically.. rogue capitalism was a term used in the late 90's in relation to the asian crisis... it is a pretty good description for what has happened in the past few years in the usa as well... i think more folks are hip to this and more open to other ideas on the way to move forward... capitalism has been beaten up and bruised quite a bit since about the same time as the soviet collapse... perhaps it is premature to write it off, but i think more people view this system with many more question marks then ever before, and i believe this is a good thing... moderation in all things is a buddhist thought... i think we need to head in this direction and however many times we get things wrong, i think this thought keeps on knocking at the door... is their a pathway somewhere down the middle that isn't so hostile to either extreme? i think so... i think the possibility for this to come about is much closer today then it was 10 years ago...

to use the words of lennon

"you can call me a dreamer, but i'm not the only one."

Fair enough. And JB Foster does a very good job of assessing today's capitalism. One thing about Marx is that he predicted that industrialization would become the dominant form of capitalism. But as we've seen, capitalists profit margins began falling in the 1970's. Finance capitalists would eventually usurp industrial capitalists by the 1990's. Instead, the "new" liberal capitalism became the dominant form of capitalism since the 1980's and 90's. Marx had something to say about fictive capital. Finance capitalism is undergoing a state of collapse around the western world, and no amount of credit inflation can revive it apparently. This is not a normal crisis of capitalism that can be fixed or overcome by one or two capitalist countries alone according to Marxists and their ideological cousins, Keynesians of today. Monetarist monetarism is in trouble. Big time.

It's not, and there are very good arguments to prove it that it's not. And you call yourself a lefty?

Polls show a spectre is haunting Europe…and much of the rest of the world November 2009

By Stephen Gowans

What, I'm not a lefty because I believe in the indisputible fact that capitalism still exists?

I think that's a very generous thing to say about capitalism and especially dignifying for those who still believe in capitalism.

That's a broad description. Socialists first described it as capitalism, but post-1929 North America saw the advent of mixed market economies with Keynes(Marxian) shaping our economies in the western world. There was very little public sector economy from 1900 to 1929. James Galbraith described the real American model and how a large part of the American economy today has nothing to do with market capitalism, Soviet style soft budget constraints in the social sectors etc and propping up the ailing US economy today in more ways than we know as Stiglitz and others have described recently.  So even he most capitalist economy in the world began to change toward a semi-state capitalist, and some would even say state socialism to lesser extents not so long after Lenin passed on. But laissez-faire capitalism in North America was laid to rest with the New Deal socialist-style welfare state and mixed market economies from about 1930 to 1960's. Many socialists will agree that the USA was the most prosperous country in world history during that 30 to 35 year time span. But that was then, and there is no turning back to those glory days even if Americans,  and American oligarchs whove taken over the powers of federal resource allocation today, wanted to.

 And Marx said that capitalism is generally money invested leading to production of commodities which are then sold at some level of profit. He wrote about finance but kind of dropped it believing that finance capital would be subordinated to industrial capitalism. Workers today are caught between two warring factions of capitalism, industrialists and finance. The foundations of capitalism today are even weaker than Marx described. Industrial capitalism spanning the globe was supposed to be what socialism takes over some day and replaces. How can we take over factories when there are none? We don't make anything in Canada, and it's increasingly true of the US economy since neoliberalism began under Reagan. Industrial capitalism once produced things as its engine of economic growth. Today that's all changed. Today finance capitalism rules and is an extractive process. A large problem with American capitalism today is that it no longer produces but consumes. As Michael Hudson said in 2003, Wall Street finance capitalism has become parasitic of the real economy. And like parasites, Wall Street has taken over the brain of its host and convinced US government that it needs to be protected and fed the blood of the real productive labour economy in order that the host can live. And it's a delusion caused by lack of oxygen to the brain of the host, or something like that. Democracy was a nice idea, and so was the idea that the original 13 colonies would try and create the first government in world history that was not based on a monarchy and dependent on European financiers. Today there is more power on Wall Street than either Main Street or Washington. Anyway, there is relatively nothing in the way of an economic engine of growth driving western world capitalism today except for debt overhead based on credit expansion. Production is offshored. Credit expansion and bubble capitalism can't continue for much longer. It's bankrupt. Finished. The oligarchs and their hirelings in government are losing political capital because of it.

We're criticizing capitalism, and yet no true capitalist state has ever existed.  True capitalism is beautiful and perfect, and if any so-called "capitalist" country is anything less than beautiful and perfect it's because it's not true capitalism!  The same goes for any future states that might appear capitalist.  If it's not perfect, don't even bother starting to criticize it because it won't be true capitalism either!  Only when it's perfect... at which point criticism will be absurd.

(Hey, this same line of reasoning seems to get some traction when applied to Communism or Socialism, so what the heck.)

My point has always been that it is futile and irrelevant for any "progressives" to debate whether a particular state is "capitalist" or not, regardless of whether that state claims to be based on free enterprise or some other system.  Does it matter to the exploited worker whether the exploitation is done by someone who claims to believe in free enterprise or by someone who belongs to or is a crony of the Communist Party of China or some other absurdly named authority?  I also do not understand the relevance of state involvement in the economy in this discussion.  Lots of crony capitalist states (call them whatever you want) have massive state intervention in the economy, but mostly on the side of the exploiters.  In this respect modern China and Canada seem quite similar in that public revenue is massively spent on subsidies for the rich and super rich.  Does that make these societies "socialist" simply because of large state involvement in the economy?  If it walks like a duck...

Okay, so we've called the most capitalist country in the world all kinds of names. The only thing I haven't heard it referred to as is a "capitalist liberal democracy", in which case we'd lose our cookies for sure. America is the new liberal kleptocracy, American oligarchy,  and Canada is a long-time liberal stoogeocracy. Okay, I think we've had enough of that by now. What about communism?

I would actually argue that Sweden is a more capitalist country than the United States.  And I know most people would disagree, simply because of the difference in taxation levels.  But you'd be wrong.  The level of taxation does not make or break a capitalist system.  But government abuse of it's control over money and credit certainly does.

It's worth noting that most free market theorists, such as Hayek and Friedman, endorsed the welfare state.  

Most free market theorists are against government-provided education and healthcare for instance.  But they're not necessary against government-funded education and healthcare.  Your mileage will vary.  The Austrians are pretty much reject all forms of wealth redistribution.  But Hayekians have often been more concerned with preserving the concept of voluntary association and choice amongst people (ie. being able to choose your education and healthcare, as opposed to having the government dictate the choices).  But they weren't necessarily opposed to using redistributory taxation to help the poor access such services.  

Most of these capitalist theorists were opposed to conservatism.  Hayek, Friedman, and even Ayn Rand all refused to associate with the conservative movement.   Yet many socialists often group them in with the conservative movement.  Some of them came into the fold at the beginning of the Reagan era, but were disenfranchised again by Reagan's overseas wars and his deficit spending.

Socialists often equate capitalism with imperialism, but this is dishonest, since most capitalist intellectuals: Hayek, Friedman, Rand, Smith, Mises, etc. were all anti-imperialist: opposing aggressive war, opposing militarism, opposing interference in the internal affairs of foreign countries.  

(Friedman is sometimes erroneously labeled as having supported interference in the internal affairs of Chile, by reactionaries like Naomi Klein.  But Friedman simply provided advice to the Chilean government upon request, and subsequently refused to accept a commendation from the Chilean government.  Any cursory research will reveal that Friedman was opposed to US interference in South America.)

One way I immediately know, when I'm debating a socialist, that the person has absolutely no background or understanding of liberal and capitalist theory, is when they try to tie capitalism and imperialism under the same ideological umbrella.  When in reality, liberal and capitalist theorists were just as opposed to imperialism and militarism as socialists.  One need not dig very deep to find evidence of this, either.  Look at www.mises.org, or www.reason.tv, or the Cato Institute; three of the largest sources of classical liberal / libertarian and pro-capitalist theory.  You will find strong themes of anti-militerism, anti-war, anti-racism, and anti-imperialist sentiment at all of them.

Yet I often find that socialists simply assume that such sources would be pro-war, pro-imperialism.  Which shows an intellectual dishonesty amongst the left, I think.

Fidel,

It's wholly dishonest to call the Federal Reserve a private institution. It's authority is derived from the Federal Reserve Act, and it's Chairman is nominated by the president and confirmed by the Congress. It's mandate is completely under control of politicians.

The last time I checked, there is no Microsoft Act and the president doesn't appoint it's CEO.

To try and call the Federal Reserve a capitalist feature is intellectually dishonest.

I'm unsure why you feel the need to school me with those quotes.  Do you honestly think that I'm this educated in economics and economic history as not to know and understand the ostensible reasons behind the creation of the Federal Reserve Bank in 1913?

I'm familiar with Willem Buiter.  And he's a reactionary fool.   Both liberals and Marxists alike would be wise to pay little attention to his worthless ruminations.

Only a fool would think that a completely government-run banking system would serve the public interest.  There would suddenly be no seeming limit at all on public spending.  The government would borrow from itself without limit, and the situation would be even worse than it is today, as the currency would lose absolutely all value.  At least there some basic principles putting pressure on government to be austere about it's finances.  But not much.

If Buiter's proposal were put into practice, there would be an immediate loss of confidence in the currency by foreigners.  With money supply firmly in political control, it would only be a matter of time until the currency collapsed completely.  Just look at what happened in Zimbabwe when the government started lending itself unlimited amounts of money.

It's an offensive and illiterate economic proposal that would destroy the economy, leave millions to starve and bring society to it's knees.  If government can produce unlimited amounts of money for it's own purposes, it has effectively no value. 

It doesn't serve economic interests when government's bailout the private sector and it doesn't serve economic interests when a government tries to bailout itself, either.  Both activities represent malinvestment and economic distortion.  There's no such thing as a free lunch.  As cliche'd as that famous statement is, it's true.  Whenever government prints money to fund it's own obligations, it makes everyone else holding that currency poorer.  

Surely you mean as it was with government-created money as a quarter of the total money supply in Canada between 1938 and 1974? In 2006, Canadian Richard Priestman wrote:

 650 times the value of the sponsorship scandal, year after year. Boy, our political conservatives sure do love banksters to hand them that much power for money creation and credit, and allowing them to load up with federal debt and with nothing down of their own money. Talk about a bank heist!

Sorry, but you're going to have to do better than this. What is the purpose of these intermediaries? Why were these middle men added, then? And why don't they make any difference?

To be fair to monetarism, if it's prescriptions had been followed our entire system wouldn't be bankrupt. Which is why Milton Friedman noted that a monetarist system should really
only need a computer program to run it. Friedman himself, was aghast at what the banking cartel (that includes the Fed) made of his theories.

Just like with Keynes they couldn't keep their hands out of the money jar when times were good. Instead they kept inflating and inflating, causing these massive bubbles. Just like how even Keynes was abused when governments continued to run deficits in good times.

Essentially this is an indictment of central banking. Not just monetarism or keynesianism. Whenever you centralize the money supply, the elite and the banking cartels will find a way to get control of the system and make it work to their own advantage.

What we need is a free market for money itself, where nobody can control the money supply. Not government, not corporations, not anybody. We should be free to do business in any currency that two parties may mutually agree upon. Be it gold, silver, platinum or private currencies backed by those commodities.

This is the only way the lower and middle-class will be able to
emancipate themselves from the inflationary monetary system.

Whether you're a central banker or a finance minister, it's hard to tell people the party's over.

And especially now that phony majority governments are so hard to come by. Our dollar democracies have been eroded by inflationary cold war era tales for middle class capitalism based on consumption.

It was tried in the inter-war years and found to be incompatible with democracy. As Britain and other countries realized then, currencies had to be maintained at specific values per unit of gold. And if inflation did occur, then adhering to the gold standard meant that cuts to costs had to happen and labour was too large a cost to ignore. And then with the economic depression post 1929, things became worse for workers. Lowering interest rates or stimulus spending was out of the question for governments upholding the gold standard. And people suffered needlessly. In the end, governments were forced to abandon that financial regime in favour of something that worked for the majority of people. The gold standard worked for the rich in a time when full voting rights was still just an idea in the minds of the lower classes ie. commoners like our grand parents and great grandparents, and very many who were martyred by economic depressions and two terrible world wars. Keynes said governments have a responsibility to create jobs and stimulate the economies financially in order to prevent needless depressions. Laissez-faire capitalism as well as the gold standard were found to be at odds with democracy in general.

Fidel, you're confusing the gold standard with a free market commodity currency.  You see, the gold standard and fiat currency have more in common than what I'm proposing.  Because, ever since the civil war in the United States, the government has through various forms of monetary control, issued paper money.  It used a Bank Chartering system, similar to the Canadian system in the 18th century.  But fundamentally, the system hasn't really been free since the civil war in the 19th century.

It may have been a gold standard per se, but it wasn't what I'm proposing.  It was still an inflationary system!

The only real time that there was a lack of an inflationary system in the United States was from 1837 to 1863, known as the Free Banking Era. And what happened in the 1860s?  That's right: the Civil War. 

In 1863, the Congress enacted the National Bank Act so it could print money to fund the war effort.  And that's exactly what it did.  From that point forward, we had a fundamentally inflationary system.  The economic crisis in 1873, just like the financial bubble that we're in the middle of, was primarily caused by the speculative bubbles that were brought about by all the low interest rates caused the the inflationary system. 

I mean, I could go on.  You're just simply mistaken if you think the gold standard was a free market currency.  It wasn't.  The government controlled it.  The government inflated it.  The difference between then and now, is that the government can inflate even more than they could then.  But you're mistaken if you think that the inflationary system is only 30 some odd years old.  It isn't.  It dates back to the Civil War.

Sure. Capitalists have been saying that their economies, in the end, weren't quite capitalist enough, or could have been more free market this and that and the other since 14th century Italy. How many times must capitalism fail in real world experiments under optimal conditions before economists and politicians simply abandon the idea and work toward developing a system that is compatible with the real world? Are human beings capable of more than being motivated by self-interest alone? Are we more than just one-dimensional beings imprisoned by our own greed? Marxists say, yes, real people are capable of a wide range of behaviours and are motivated by so much more than money and material acquisitiveness. Marxists say that to reward people for such a limited range of behaviours and motivated by self-interest to greed - not only distorts economic results but human nature as well. Therefore it's become obvious to me that capitalism is the abomination which maketh desolate mentioned in the bible, and that predates even your civil war example of utopian kapitalism.

I also don't disagree that people are motivated more than money.  I'm a capitalist, but I'm not motivated primarily by money.  I've passed up higher paying jobs, I've sacrificed substantial amounts for my family, and I recently wrote a cheque of $1,000 to support the relief in Haiti.  And believe me, I'm not rich.

I don't buy expensive brand name clothes.  I don't seek out status symbols for myself.  I'm about as anti-consumerist as you can get, and yet I'm a capitalist.

For me, capitalism is the only thing that's compatible with my concept of liberty and non-aggression. It also so happens, that I don't believe that central planning can work on a large scale for an advanced civilization.  

I believe this for scientific reasons, principally that of Chaos Theory, the Uncertainty Principle, and the Observer Effect.  We can't measure demand in real time.  Nobody can.  What free markets allow, however, is for the pricing system to react a signalling system of supply and demand in a massively decentralized way.  There's just no way that capital allocation could be done efficiently as with free pricing.  

Could it be done at all? Yes. I don't think central planning is impossible.  But what I do think is that centrally planned economies are inherently like houses of cards.  They're incapable of repricing the supply for demand and dealing with distribution disruption when the system is suddenly stressed, like in a natural disaster.  This is why such economies have been more susceptible to things like famines and mass shortages of basic consumer goods.

So for me, I'm not a capitalist because of desire to achieve maximum wealth, I assure you.  Anybody who knows me, knows that I'm far more passionate about human rights, philosophy, and engineering than I am about wealth accrual. I think you'd find this to be the case among many true capitalist libertarians.  Who, more often than you might think, are your typical starving artist. And I could introduce you to a lot of them. :)

Of course people profit from war, and that's a problem.  But I mean, government is the primary tool by which war is waged.  And those people who profit from war, will take advantage of war.  That's easy to understand. 

Certainly though, capitalism doesn't benefit from war.  It's an old conservative and left-wing folk tale that World War II was great for US economy; it was actually terrible.  There were shortages, unemployment was high, etc.  

In general, while a few people make money, war hurts the majority of the market.  Big time.

The truth is that if markets are that vulnerable to bad information, then what good is it? Why should democratically elected governments put so much faith in free market voodoo and whims of the global money speculating herd? 

Well, I answered your question already.  They're vulnerable to bad information, but central planning is more vulnerable.  Mainly because it's impossible to collect that information.  Quite simply because the economic variables in play are astounding.  I mean, it takes economists months if not years, to analyze the supply and demand patterns of a single industry.  Let alone having someone do it in near real time.  The proposal is absurd.  

The economic calculation problem which you're calling free market nonsense, is certainly not nonsense.  And it's not a problem that you can dismiss easily.  Even former Soviet economic planners have conceded the point. And many social democratic economists were brought to their partial endorsement of markets because they couldn't form an adequate response to the problem.

The only compelling Marxist response to the ECP, is the theoretic proposal of a Steady State Economy. Which is a theory that essentially says, that as long as people generally have the same daily routines for protracted periods of time, you don't have people changing careers every few years (representing a percentage of the population changing careers at any given time), and so on and so forth, central planning could theoretically achieve something closer to an economic equilibrium.  But the proposal would have to discount any rapid technological or social change, which is unrealistic to expect in an advanced civilization.  So I think Steady State is sort of in theoretical land.

I could argue about the Great Depression all night. In fact, I could probably write a novel or two of thoughts on the Great Depression.  What I will say is this: the Great Depression was brought about by a massive asset bubble just like every other asset bubble that we've seen in the 20th and 21st century, and it's root cause can always be tracked back to the money supply if you're willing to dig deep enough.  

The bank failures you speak of were largely the result of the Hoover government restricting the money supply -- which was erroneously thought at the time -- to be a good strategy in situations like this.  As the Hoover government limited the amount of money in circulation, American's panicked and began withdrawing their accounts, fearing that their banks would run out of cash. 

Hoover also brought in the Smoot-Hawley Tariff Act of 1930 which imposed 60% tariffs on all imported goods into the United States, which Canada and Great Britain greeted with retaliatory tariffs.  The effects of this resulted in a near halt in international trade.

I think it's gross oversimplification to say the Great Depression's primary factor was that the rich were too rich. The government did a lot of stupid crap which amounted to throwing gasoline into a fire. 

But unemployment was even higher as a direct result of policies for laissez-faire capitalism. Political conservatives did nothing to alleviate the depression and actually made things worse by some policies for 'hands-off the economy' approach with higher tariffs and raising taxes for the middle class, and lowering them for those most able to afford them. Conservatives of the 1930's said that there weren't enough products produced for people to buy and thereby causing a slump in demand. Meanwhile, European and western world capitalists were financing and aiding Germany's re-armament for ten years leading up to the war. Laissez-faire policies here in North America had produced what army recruiters described as too many emaciated young men who were unfit for combat duty. Capitalism's abominable cousin, fascism, threatened to take over Europe, Asia, and the world if their do-nothing policies had been allowed to continue. The so-called free world could no longer afford to do nothing after capitalists created a corporate-sponsored war machine in Nazi Germany.

But war is the ultimate conclusion of crises-oriented capitalism. he historical record shows that predatory capitalism devours any other form of democratic capitalism eventually. "Dollar democracy" doesn't work. Richard M. Nixon himself wrote that warfiteering is the scourge of humanity and must be stopped before it's too late. We have to wrest control of the money supply from capitalists and put it into the hands of democratically elected leaders. Money is just means for exchange and trade and doesn't guarantee that it can't be used for war, of course. But history shows that the reasons countries go to war is about resources and capitalist expansion. The only way to eliminate competition over resources is to eliminate borders. Fascists and their capitalist friends attempted to eliminate borders for all time between the years 1939 and '45, too, but their goals were different from the democratic ones we on the left have in mind. The world can't be run monetarily, and the eventual end result of capitalism is predatory capitalism, and war. The solution to this problem is democracy and rule by the large majority in the most inclusive way, and that means advanced democracy. We're not there yet, and I believe there are political forces working to maintain dollar democracy and rule by a relative handful few superrich and powerful elite around the world.

And we can also see some Soviet central planning today in even the most capitalist economies. The soft budget constraint was a tool used by Eastern European countries to finance social sectors and infrastructure spending. The same kind of non-market resource allocation has been used by various US governments since the collapse of laissez-faire post-1929 through today. US governments have since realized that markets are incapable of delivering certain amenties and services to the public, and-or they have been reluctant to attempt market solutions in those various social sectors and infrastructure so vital to the post-war mixed market state capitalist system.

Cybersyn was an attempt to create a centrally planned socialist economy based on information. So capitalist historians can not say that socialists have never attempted to address the situation of feedback mechanism within economies. And Chile's recent history is a good example demonstrative of how capitalism and democracy are incompatible. Michael Hudson wrote about the concept of economic equlibrium:

And this is evident today with so many chronically hungry human beings around the world. 25 years ago, there were 500 million. Today the chronically hungry number at least one-billion. The FAO says that 85% of chronically hungry nations are exporting food to "the market" while somewhere around 55 million die of the capitalist economic long run every year like clockwork. This is a most spectacular failure of free market theory and dating to at least back '47 in Ireland. Keynes said that in the long run, we're all dead. That is the ultimate capitalist equilibrium theory at work with cash crop capitalism failing hundreds of millions of hungry and starving human beings around the world. There is no lower point for equilibrium theory than the death of 35, 000 children every day around the capitalist thirdworld. Capitalism for tens of millions means the kiss of death will visit them every day and anually without fail. It's more than a problem of resource allocation. The system is rotten to the core.

Former Wall Street economist Michael Hudson says that classical economic theory of Marx and Marxists is being proven correct today with the collapse of debt-driven capitalist banking and finance.

And Cybersyn was not a real serious effort. It was concept proposal that never got off the ground, and it still didn't present any serious solutions to the economic calculation problem. Because supply and demand is not simply a function of input/output, it's also a function of cost/price tolerance. Which Cybersyn had no proposals to solve with it's network of Telex terminals. It also didn't address the consumer function.

It was a fantasy.

My point was that both system tend to be based on conceptual frames works and that implementation is never as good as the concept.  You agrued that a command economy cannot allocate goods efficiently, if one looks at empirical evidence neither does a market economy.  A market may out perform a command economy in many instances but there's no evidence that absolutely superior in that there are clear gaps in the way a market operates and that these gaps may be filled in some instances through centralised allocation.

Fidel,

I'm more than happy to have a protracted discussion and defend all my points ad nauseum but there are a few problems here.  Up until now, I've avoided formality, but in most cases I'm a stickler for logical argumentation.  

One of the things that least impresses me in a philosophical argument, is when people quote the opinions of others. This is known as an argumentum ad verecundiam. When one says, X person was a capitalist and is now a Marxist, for instance, this contributes nothing to the debate.  No more so than saying X number of people believe that aliens exist.  So as an academic, I have to tell you, that when you paste in the opinions of others I basically just ignore them as a reflex.  

Second, your arguments are more and more becoming a plurium interrogationum,where you start throwing so many points, conclusions, and supposed dilemmas all at me at once.  This itself creates an argument fallacy, because it's not reasonable for me to debate you.  I could spend 30 paragraphs debating your first sentence ("The evidence is everywhere all around today and embeded in the historical record.") alone.  It should go without saying that I don't think the historical evidence points to the conclusion that you draw.  

I've clearly demonstrated that I'm highly educated and well-versed in history.  Yet you speak as if the historical record presents a prima facie case against capitalism.  How could this be?  We spent the entire beginning of the conversation debating whether or not we even had true capitalism.  For you to then move from that debate to a position that history itself is a prima facie case for Marxism is pretty over-the-top, to say the least.

I mean, I'm not suggesting you're not well-read Fidel, as you clearly are.  You're pulling all these historical points from somewhere. But you're not actually presenting an argument.  And even then, your historical arguments are still not logical.  Proof by example is fallacious in and of itself, unless you explain why it's relevant to the discussion. You can't simply point out historical cases that support your case.  I could present you with historical "evidence" that aliens crashed in Roswell, New Mexico.  

More broadly however, your historical evidence is cherry picked because it cites historical examples that appear to support your claims against capitalism.  But I could sort historical evidence that appear to support my claims against Marxism.  And we could spend the next ten years doing that, and we'd get nowhere. Which is why this type of argument is not considered logical.  

I've also presented substantial arguments as to the cause of many of our current problems, in regards to the inflationary monetary system -- many of which you appear to have agreed with.  But then you've committed a logical contradiction, where you construct arguments against capitalism based on evidence collected in periods where you've more or less conceded capitalism didn't exist.  At this point, it becomes difficult for me to even know what I'm arguing with you about.

Your argument for Marxism is even more broadly, a categorical syllogism in the sense that you try and present the case that Marxism's validity has been affirmed based on the fact that capitalism has failed to satisfy certain requirements you've presented (negative proofs).  This is specifically referred to in formal logic as a affirmative conclusion from a negative premise. (Edit: To clarify, what I'm saying here is that even if you did succeed in deflating the arguments for capitalism, you wouldn't succeed in proving the argument for Marxism.  Such a proposition is necessarily illogical.)

Understand, that I'm not trying to say your conclusions are wrong because you're presenting them illogically.  But I am saying that you need to construct better arguments, because I can steer an aircraft carrier through the logical gaps you're laying out for me.  :)

Well I think we should stick to the historical record on capitalism dating back to 14th century Italy and not debate ad nauseaum the finer points of utopian capitalism which has not and never will exist in the real world.

Well if you're highly educated and knowledgeable, then you are obviously siding with the capitalist-fascist history of Chile and not very impressed with socialist planning for Cybersyn.  If you are trained to think logically, then I think what you might say for the sake of reasonable debate is that the results were inconclusive based on the fact that it was short lived due to Chile's democracy being overthrown by a US-backed military coup by 1973. Capitalism has failed in a number of real world implementations, whereas socialism is a relatively new political and economic system worthy of consideration by world leaders. But to say that Cybersyn was not a serious effort to develop an information based economy then is anywhere from illogical to stating logical fallacy and egregious error of historical fact in order to support what you're saying. And we are all more clever than that here. You'll find babblers to be a tough audience in general. War capitalism and aggression against sovereign countries is a part of the historical record since McKinley and Theodore Roosevelt and golden age of industrial capitalism based on gross exploitation of workers and at the expense of society as a whole. Capitalists of today are pursuing the same kind of warfiteering profits with Keynesian-militarism since WW II. Where profits of anywhere from 300 percent to 1000 percent are had by warfiteering capitalists, it's a sure bet that we will continue to see more war as a direct effect. This is more an argument that needs to take place between capitalists, because socialists concluded long ago that capitalism and democracy are two conflicting and separate ideas incompatible with the other.

Well if you're highly educated and knowledgeable, then you are obviously siding with the capitalist-fascist history of Chile and not very impressed with socialist planning for Cybersyn

Obviously.  

I'm done with a debate when somebody resorts to ad hominem. I was trying to have an intelligent discussion in good faith.  I wasn't here to troll, insult or what have you.  I was here to have a honest debate on the relative merits between capitalism and communism.  Unlike many other conservative trolls that might stop by here, I was actually here with an open mind to see what people who don't hold my positions actually think.

This is more an argument that needs to take place between capitalists, because socialists concluded long ago that capitalism and democracy are two conflicting and separate ideas incompatible with the other.

Well, have fun in your little echo chamber, I guess.  I prefer to debate people who disagree with me, in order to challenge myself and keep myself honest.  But if you're more comfortable debating people who accept your worldview, then by all means go ahead.  But I would say that makes you more like conservatives than less like them. 

The primary feature of a free market is a voluntarism.  The right of any two parties to enter into mutual contract for exchange.  

However, as I've previously stated, I am amenable to the existence of a welfare state.  So I do not advocate for a purely anarcho-capitalist utopia.  Instead, it is my goal to advance a position that strikes an appropriate balance between achieving a basic standard of living within society, and maximizing individual choice.

There's a few practical consequences to what this means.  For instance, I may support government-funded education.  However, I am against the government directing children into a specific government-controlled education program.  Rather, I would endorse educational vouchers where government would provide for the cost of education up to a certain level.  It may still provide public schools, but it will allow private schools to compete for public funds.  

I believe that markets do best when consumers are provided the ability to make choices which best suit them.   It allows consumers to punish inefficiency.  For instance, if schools were to do particularly badly in relation to other schools, parents may elect to redirect their vouchers to a competing school.  In effect, punishing failure and rewarding success.

This is an important issue for me, because I believe that public schooling has been used by politicians punish minorities and the poor.  It has been well-documented how inner city schools have been left to languish while suburban schools are often more well-equipped with modern computer equipment, better sports facilities, etc.  A voucher system, would allow inner-city parents to emancipate themselves from this type of class trap.

So that's one practical example of what a free market means to me.  

What happens though when you have capitalist governments in North America supporting a religious oriented public school system in  thirdworld capitalist countries like Pakistan, and all the while propping up a conservative nanny state education system at home? Because according to US whistleblower Sibel Edmonds and other sources, this is what's been happening since the 1980's with actual capitalism in an attempt to displace secular socialist thought in Central Asia. And the sons and daughters of the elite in those countries don't have to rely on the US-Saudi funded public education system either. They attend the schools of the rich and privileged elite here in the west while the poor are stuck with fundamentalist public education funded by the capitalist system. In this case, would scrapping public education be a real solution, or to scrap capitalism and replace it with something that works for the largest majority of people?

There are problems with such a market model for education. It's students who are the "customers" being served by schools, not the parents - making parents happy is often a good thing but not always, such as in the case of parents who'd rather their kids get religious education rather than science education. and the success or lack thereof of the school might not be apparent until years later.

Which is why schools should not be funded only from local property taxes. It has nothing to do with the lack of vouchers. 

And shove them into another type of class trap. Families in poor areas will have trouble coming up with the money to transport their kids to the better schools, to buy uniforms if required and related expenses so they'll be stuck with the school in their neighbourhood anyway. Trying to turn schools into locations of McEducation will not be a success. Higher standards will be.

No doubt it was humiliating for you.

Because you might learn something?

You don't seem to respect the mandate of this forum, so I don't see any need to waste any respect on you. I should point out that I'm really not concerned with impressing you, though you appear to think you're going to impress the hell out of us.

No such luck, I'm afraid.

No, instead you regurgitate von Mise as if it's your own intellectual genius. BTW, the recommendation of 'Shooting the Hippo' wasn't really meant for you at all; it was intended as an antidote to your headache-inducing spew for everyone else here.

What's anti-intellectual, disrespectful and dumb is you showing up here as if you're going to re-educate us all - all the while completely ignoring the honest questions and serious objections of people kind enough to tolerate your presence here.

It's amazing how angry and hateful some people are of those who do not accept their worldview here. I mean, I consider myself a progressive, for instance, despite not being a socialist.

I believe that gender is a mainly social construct, that large swaths of our society still hold racist views. I have openly slammed Stephen Harper for proroguing parliament. I have slammed Harper's government for it's treatment of Muslim Canadians overseas, most recently Omar Khadr. I do not defend, and in fact slam corporate interests that hold power and sway over this government -- in this very thread.s

Yet, because I happen to believe in the free market, I'm treated like a piece of dirt. That's really a way to build dialogue and bring people to your side. I wasn't aware that socialists had a monopoly on the progressive ideal.

I'm here to re-educate nobody. I went and debated feminists years ago, and they opened my eyes to sexism and my male privilege in society. I legitimately had to concede those arguments.

No socialist has ever satisfied my concerns about the economic calculation problem. And my purpose here was simply to bring my arguments for what capitalism really is. It's just amazing the vitriol you get from people. You're almost as bad as neoconservatives. Yesterday, I was accused of supporting terrorism by Adrian McNair of National Post Full Comment for suggesting even accused terrorists have legal rights. Today I've been accused of being on the side of fascists by Fidel for daring to be a capitalist. Intellectualism certainly abounds in this world.

Would you also say that there were serious attempts to create a free market democracy in Chile from 1973 to 1985?

Fidel,

For me, free markets and free people go hand and hand. So you're not going to get me to rise to a stirring defence of the Pinochet regime.

I realize that you've become accustomed to thinking in terms of black and white, as the presence of this question indicates. And if you consider Naomi Klein to be a reliable source of information, you might have even come to believe her libel against Friedman on the matter, who she claims supported the Pinochet regime. When, in fact, he supported a hands-off policy for the United States and South America.

Except that free markets only guarantee the right to own but never actually the right to exist. So, unfortunately, the homeless are never "free".

But of course, libertarians like myself, Hayek, Rawls, and even Milton Friedman, all support the existence of a welfare state.  We simply do not believe in the feasibility of centralized planning and collective ownership of production. 

This is probably about the fifth time I've pointed this out, and I know you're probably used to arguing with brainless conservatives, but at this point,much of the responses are amounting to a complete denial of my position.  For instance, the fact that Fidel has ostensibly read all of my responses is in this thread, and then felt it necessary to force me to qualify my position on Augusto Pinochet shows just how shallow this debate is.  But apparently, according to some here, I should view these as "completely reasonable" challenges to my position and kiss people's feet for extending me the honour of having people "tolerate" me.   If your revolution ever get off the ground, I certainly hope you "tolerate" my right to live.  

In any case, you don't see me asking socialists to justify to the Stalinist purges or the killing fields of Pol Pot.  I at least have the intellectual honesty to accept that such events are not endemic of socialism per se.  However, it seems that people here are sufficiently convinced that someone like Pinochet is endemic of economic and political liberalism.  I'll be honest, at the risk of reducing this conversation to that of ad hominem, when I say that is simply insane.

I do not believe that socialism is inherently a tyrannical system, but I do think many socialists are and have been tyrants.  Ideology is often a thin-veil behind which the powerful justify the terrible.

Your worldview is that of class struggle and revolution against a capitalist class.  But I would contend that this is a 19th century interpretation that is dated and is in dire need of revision.  The 20th century has been filled with tyrants who hailed from every ideological position imaginable, including liberalism and Marxism. 

When I look at Chile I don't see an either-or proposition.  While neoconservatives smile upon Pinochet, socialists smile upon Allende.  You're both playing for teams.  Except you're both playing for the same league.  My worldview is not defined in choosing between George W. Bush and Hugo Chavez.  I choose neither.

Too much cognitive dissonance for you?  I mean, thought-terminating clichés aside, what exactly about your ideological worldview extends to the real world?  I'd say that on balance, libertarianism and Marxism are equally fringe these days.  Or have you convinced yourself otherwise?

Excuse me sir, but there is no point to address.  You are not having a debate here.  Rather, you are taunting and insulting me.  Asking someone to qualify the relevance of their position to the "real world" is an ad hominem. It is a thinly-veiled insult worth no intelligent response.  

In fact almost everything you've said to me has been presented as an ad hominem.  

- "You don't seem to respect the mandate of this forum, so I don't see any need to waste any respect on you."

- "I should point out that I'm really not concerned with impressing you, though you appear to think you're going to impress the hell out of us."

- "No, instead you regurgitate von Mise as if it's your own intellectual genius. BTW, the recommendation of 'Shooting the Hippo' wasn't really meant for you at all; it was intended as an antidote to your headache-inducing spew for everyone else here."

- "What's anti-intellectual, disrespectful and dumb is you showing up here as if you're going to re-educate us all - all the while completely ignoring the honest questions and serious objections of people kind enough to tolerate your presence here."

Your entire position is an attack on my character (ad hominem), and my motive (also ad hominem).  I am making no effort to justify myself to you, because nothing you have said to me compels me to do so.  If you have a specific objection to a point I've made, I would gladly respond in an attempt to clarify, defend the point, or failing the ability to do so, properly concede. 

Your demeanour reminds me of a George Bernard Shaw quote, in which he was arguing for involuntary euthanasia of unproductive members of society -- "Sir or madame, now would you be kind enough to justify your existence?"

I'm not sure how this is relevant.  At want point have I expressed support for US Foreign Policy?  But in any case, you're not giving Chairman Mao enough credit.   Some estimates have the number of political executions under Mao at upwards of 5 million.  And what about the 20 to 46 million deaths in the Great Leap Forward?  Surely, Mao deserves some of that credit too.  In any case, even if we go by conservative estimates, Mao surely came close to -- at the very least -- being in a tie with Pol Pot.

Mao must be turning in his grave at the lack of respect you're giving him for his body count.

This is where you fundamentally go off track, as apparently you are pre-supposing that equality exists amongst all.

It does not, as such no libertarian, or communist for that matter, utopia can exist, it is merely people telling lies to themselves, as opposed to admitting they have a raw desire to have power and dominate others, and as such are part of the problem.

I am not a Stalinist and I disagree with his project, so you cannot use that as leverage in an argument. You were defending the position of Friedman and likened yourself to von Hayek and Friedman. For that reason I criticized both the application of their thought in the real world AND the anti-democratic nature of Hayek's thought.

I would like to know how you address the issue of liberalism and democracy when its ideals have to be imposed through force - not choice.

Liberalism cannot be imposed with force.  That is counter to the whole philosophy of liberalism.  

Democracy and liberalism are somewhat at odds.  You'll get no argument from me there.  The whole theory of the liberal democracy is the idea that the individual is supreme, not the collective; democratic consensus is not a license to override or abridge individual rights.  Rather, in the liberal interpretation, a democratic majority, seeking to impose it's will on a minority is the one committing the act of force.  This is often referred to as tyranny of the majority.  An example of this might be: a conservative majority denying women the right to have abortions.  Another example might be: a socialist majority expropriating property from the rich.  Or an authoritarian-left majority imprisoning those who espouse racist views.

Liberalism reduces democracy to function within a framework of absolute individual rights.  This is quite simple, and straight forward to understand.  You're not going to get me to defend the democratic ideal in it's absolute form, as I don't support the concept in it's purest form.  I don't think the mob running roughshod over individual rights in the name of socialism, social conservatism, or any other ideology is justifiable. 

Unlike say, Murray Rothbard, Mises, and Walter Block, I do not subscribe to the idea that property rights are absolute, either.  Especially when property has a significantly detrimental effect on the rights of the individual.  For instance, I don't believe that Bob has a right to buy a ring of property around Sally's house and prevent her from egressing or ingressing.  I support appropriate easement on such rights.

You need to realize there are two groups of libertarians: the propertarians and the liberty-maximizers.  The propertarians believe all rights derive from property, and the latter do not.  I am of the latter. Many libertarians of the latter category tend to be utilitarians, myself included. 

You're completely lost at this point, I can tell. The Yanks have had a hand in Latin America since Monroe. And today, Washington describes Haiti as the freest trading nation in the Caribbean, and it's just another thirdworld capitalist basket case. Former CIA specialist on Latin America Philip Agee quit the company because he realized just how oppressive US foreign policy for Latin America is and especially with the 600 attempts by the CIA and their mafia friends to murder Fidel, and fomenting anti-Cuban terrorism since 1959 that has cost the lives of thousands of innocent Cubans.

Thirdworld capitalism in Latin America did not arise spontaneously or naturally as was not the case with the history of capitalism. Capitalism requires full force of the state to implement its various repressive policies and to remove and trample pre-existing rights of millions of people to live freely from the land. Our largest trade partners have basically upheld the land owning rights of a few dozen rich families in Central America and leftovers from Spanish colonial laws. Predatory capitalism hasn't changed the Spanish colonial setup in Central America or the  Caribbean a great deal since Monroe doctrine.

That's like asking how the US could survive without massive energy and raw materials exports on the cheap from just Bananada under a corrupt stoogeocracy here for too many decades in a row. One trade embargo by Canada and the Yanks would squeel like stuck pigs. Meanwhile the Yanks will allow the CUbans to buy a range of items from the States, but the Cubans can't sell anything to the mainland. Imagine that Newfoundland or PEI were disallowed from trading freely with the rest of Bananada. And then when things don't look so good on those islands after a few years, some jerk with a typewriter tries to tell you that it's because Danny Williams or the other bozo premier don't want to trade with the mainland and prefer that Newfoundlanders do without. Imagine our stooges in Ottawa telling PEI to shove their potatoes and anything else they've got. These genocical trade sanctions are the policies of a country that allegedly claims to support free trade. It's not true, because the vicious empire has actually used trade as a weapon throughout the cold war and today.

I imagine there'd be a good deal more than just that...

http://www.peacemagazine.org/archive/v09n2p20.htm

Let us guess which country is. Would it be Hong Kong before the handoff to China and a few years before elections were suddenly in vogue for that island? Singapore? Iceland? Ireland!

You were asking about Cuba, and we let you know what's up with that island nation under siege since 1959.

Uh, another Libertarian denying what they really want is power over others.

Academic debate is fine. But I think that this is a hands-on kind of forum where people prefer to discuss real world implementations of the actual political and economic policies. I think physicist Lawrence Krauss said it best recently about string theory and supersymmetry as theories for everything - it could be a theory of anything for lack of testability. Real world experiences are what count for ordinary people not the utopian version of the way things should be. Most of us are not academics or capitalist hirelings shoved into power, nor are we paid mouthpieces for the stoogeocracy. We're just ordinary people who, as a whole,  way out number the status quo and handful few elite running things. Capitalism is like string theory in that it requires a leap of faith for some scientists to consider. Although I think there is more evidence for string theory than exists for actual working capitalism.

kropotkin, it's evident that brockm is awaiting an excuse to ignore your perfectly reasonable question, as he has ignored most of those dealing with the real world. Let's hope that the thread is soon closed, so that his humiliation here is ended.

LTJ has the effect of brockm on this board just right.

You got to be crazy, you gotta have a real need
You gotta sleep on your toes and when you're on the street
You got to be able to pick out the easy meat with your eyes closed
And then moving in silently, down wind and out of sight
You gotta strike when the moment is right without thinking

And after a while, you can work on points for style
Like the club tie, and the firm handshake
A certain look in the eye and an easy smile
You have to be trusted by the people that you lie to
So that when they turn their backs on you
You'll get the chance to put the knife in  .... Dogs,  Pink Floyd, (the only tune I've ever air guitar'd to when barking mad)