I have come to the conclusion that, while capitalism is the best economic system in theory, in practice it is completely unworkable because it does not consider the propensity for greed. I spent many years in the corriders of power on Bay/Wall Street and saw firsthand how money can corrupt otherwise decent people.
Freddie and Fannie were at fault. But far more at fault were the huge mortgage companies like Countrywide that defrauded loans, the predatory banks that lost more than 3/4s of all the default in NON-government ARMs, and the banks that were selling known crap derivatives to their customers, lying to them that they were great buys, then insuring them for their inevitable defaults. That was fraud. Countrywide and Goldman Sachs were by far the most unethical institutions. So its going to be a hard sell to all the unemployed folks that watched greed run the economy off a cliff that its A-OK for 'creative destruction.' Most of them haven't gotten a job since. Romney's far better than Santorum or Newt, but he's going to lose to Obama, as amazing as that may sound.
The other thing with capitalism is that it is an ethically-neutral system. This is both a positive and a negative. Positive in that it makes no moral judgements and is therefore conducive to business; negative in that it is entirely possible to undertake actions that may be perfectly legal, but ethically questionable.
Oh, and I find the adoption of the term 'creative destruction' to be ironic as hell. It was first described as a condition of capitalism by none other than Karl Marx. He was speaking of the destruction of old economic orders and their reconstitution into the capitalist system. Other German thinkers toyed with the idea. It resurfaced in the 50s by Joeseph Schumpeter. Schumpeter devoted an entire book to it, and ultimately argued that 'creative destruction' would be the cause of the END of capitalism - this from an Austrian school economist. Creative destruction would cause the rise of corporatism. This in turn will foster a reaction of democratic socialism, and the lack of fulfilling work, the inequities of the system, and the power of the intelligentsia would eventually merge pure capitalism to a limited form of socialism. This is largely what we are seeing today. He saw politics, sociology and economics as interwoven, and was an adherent of evolutionary economics.
Ironic? It's not surprising that bright people can come up with good phrases to describe things that are happening even if a lot of what they believe is otherwise completely wrong.
The irony part is the adoption of a Marxist phrase that has been at times adapted as the underlying reason for the ultimate failure of capitalism (and make no bones about it, Schumpeter was a dedicated capitalist) by people who seem damned driven to make sure the prediction becomes a reality - greed at any cost might as well be the mantra for the current capitalist around town. So yes, there's a bit of irony in that.
Oh, and for a double dose, Schumpeter pointed out that it was going to be the intellectuals that ultimately did capitalism in - but only the elevated wealth of the capitalist system would allow for the education levels necessary to them to be in a position to challenge the system itself.
Capitalism doesn't presume that anybody gets anything that isn't received in exchange for some sort of value. You don't buy something for a dollar because it's worth a dollar -- you buy it because it's worth more to you than the dollar, and the seller sells it because it's worth less to him than the dollar. The notion of "greed", as applied to capitalism, suggests that people should stop receiving any more money once they have received "enough." But if they're producing some sort of value in exchange for this money, then that sends a signal to cap their output once their compensation quota has been reached. Why continue to work after you've made all the money you can? Now, if you want to argue that "greed" means people shouldn't be able to run their businesses so as to impose externalized costs of doing business onto everyone else, then I would agree that is exactly government's role in capitalism. However, people who emphasize this government role also seem to believe that reinternalized costs will be borne by the capitalist, when in fact what has occurred is that the true cost of production is now reflected in the product. In other words, if you reincorporate externalized costs into production, this increase is generally passed on to the consumer, because the capitalist will walk away from the deal if you try to force him to pay it out of his profits. He will still make less profits for reasons I will explain, but he will not lose money as long as he has the option to walk away from a business that's eating up his capital. So why do capitalists seek to externalize costs, if those costs will only be borne by the consumer anyway? Well, because at a lower price there are more consumers, and thus more profit from the added volume. So when you reincorporate the externalized costs, the price goes up, and consumers who can't afford the corrected costs no longer buy the product. And the capitalist loses the profits from those sales. So what greed is, then, is a desire to serve consumers who cannot afford the true cost of a product. How eeeeevil. And those who fight greed are ensuring that consumer prices remain out of reach of those who cannot afford those true costs. What heroes!
I actually don't disagree with your post. It's just too bad it usually doesn't work like that in the real world.
Greed is selling water to victims and First Responders on 911 for $50 a bottle, as a local Starbucks did. Maximizing revenue can just be pure avarice depending on the situation - such as spiking the price of a drug that cost $15 a pill already on the market to over $2000 a pill when it was discovered to help people conceive. Greed is fraudulently accepting loan applications because your bonus goes up even when it eventually destroys the company you work for. Your argument on Greed is so devoid from reality as to be laughable.
Capitalism "works" just fine at what it's supposed to do. It is not meant to guarantee a prosperous society where no one is at the mercy of greed, unpredictable market forces, or their own bad luck/poor decision-making. It is not meant to guarantee government solvency or a stable economy for your society, and it is not a vehicle for satisfying your entitlement wish lists.
Or elevate nobody, if there isn't anyone around willing to take advantage of the situation. I'll please hank hill by repeating something I say a lot: Stratification is the inevitable and proper consequence of freedom.
Why we bother pretending we can engineer favorable outcomes for the whole of collective society, without compromise or tolerance for envy? Because humans are fearful animals who must will themselves every day to live with uncertainty and uncaring consequence.
Sorry, I don't put intelligently engineered predation under "uncaring consequence". People aren't weather. They're responsible.
Neither do I. Nor are they all 100% helpless victims of random chance with no ability to affect anything. Yes they are. Everyone who ever makes a choice, no matter how sympathetic of an image they project.
But only to depose the insulated class of corporate/political elites making our "democratic" process an exercise in empty symbolism. There will never come a time where a person should expect to be guaranteed a fat and happy life, and I oppose any effort to engineer it.
Undoubtedly. There's no such thing as a "true" expression of any ideology. There will always be those who overstep their bounds and take more than their share of the pie. And that observation applies to both rich and poor, capitalist and communist, as long as we're all still talking about good old-fashioned human beings. Just remember that when someone tries to convince you some populist leader is going to protect you from big business or big finance taking all your stuff. When it's really that leader you have to keep an extra set of knives out on the lookout for.
No, I described greed as it applies to capitalism. I didn't say capitalism should never be suspended. Furthermore, economics tells us that $50 water is a powerful incentive to drop whatever you're doing and start fetching water. That's not exactly a bad thing. Maybe this has something to do with needing a license to sell water, making it illegal for everyone else to sell it straight from the tap on the sidewalk for a quarter? Is that what you call capitalism? Maybe the pill costs $15 to manufacture, but what did it cost to develop, and have those costs been recouped? And how does a mere pharmaceutical company stop other companies from selling it for $16? Are you sure the problem is the capitalists? That's not capitalism. And if businesses practicing something other than capitalism are destined to fail, then that's an argument for capitalism over other models. And, btw, if such a business gets bailed out, that action's not capitalism either.
And I think it's too bad that more people don't understand that's exactly how it works in capitalism in the real world, or that most of what we call capitalism in the real world today is actually something else.
Stewey Griffin- Y'know, I could have just not brought you anything. Brian Griffin- ...it's almost like you didn't. If you're not even in the fucking ballpark of the ideal, drop the fucking label. Stewie's candle wasn't a gift, and this corporatist plutocracy bullshit ain't capitalism.
