Can Capitalism be replaced ?

[EmoBorg]

Capitalism has emerged as the most dominant economic system in the early 21st century.

Capitalism has uplifted hundreds of millions out of poverty in China and promises to do so in India and other developing countries.

But it does have it's faults like the widening gap between the rich and poor and crony capitalism that is affecting the developed countries economy right now.

For example the company i work for has come under hedge fund control in recent years and hence we have declining benefits and lower bonuses despite higher net profit in recent years. The hedge fund funnels the additional profits back to the investors of the hedge fund resulting in less bonuses for the employees of the company. This is one of the ways of how the rich get richer and the rest of us get less money.

Without doubt, Capitalism does work but there is weakness within this economic system.

Could there be a economic system in the future that could replace Capitalism?

Could advances in technology result in a new techno-economic system?

Could a nature based based green economic system replaced capitalism?

Could a new and dynamic form of socialism replace capitalism?

Is there anything in the future that could replace Capitalism?

 

[CorporalClegg]

So is this thread about communism?

 

[EmoBorg]

So is this thread about communism?

I don't think so. Capitalism replaced the earlier Mercantilism system. I was wondering what could replace Capitalism in the future.

 

[RB_Kandy]

Could advances in technology result in a new techno-economic system?

Not unless that technology is creating a finished product out of thin air i.e. press a button and there's your house, press another button and there's your car, press another and there's dinner.

Technology has only seemed to make capitalism and stronger economic system.

Could a nature based based green economic system replaced capitalism?

Only if you mean hunter gatherer, tribal society, where we walk around in animal skins, pick berries, and live in a straw hut.

Could a new and dynamic form of socialism replace capitalism?

Only if it's radically different than the communism and socialism we've seen in the past.
Someone might ask "what is the difference between Socialism and Communism" the best answer I ever heard was given by a speaker for The John Burch Society "A communist is a socialist in a hurry."
I've noticed socialists are quick to denounce communism, and swear they're nothing alike. Unfortunately, it feels like when a member of the KKK denounces Nazism, and swears the Klan and Nazi's are nothing alike. And sure there are differences, just none that make a difference.

Could there be a economic system in the future that could replace Capitalism?

Is there anything in the future that could replace Capitalism?

Those are the same questions. And the answer to both are "Maybe. Who knows what the future holds."

 

[Davros]

It doesn't need replacing, just reigning in.

 

[cooleddie74]

Capitalism needs common sense limits, rules and regulations to protect as much of the general public as possible from abuse, threats to health and fraud. A sensibly and logically regulated free market with elements of a public/state sector coexisting alongside it works and will continue to work.

But the way it functioned during, say, the Gilded Age or the runup to the recent global financial crisis? Hell, no.

 

[The Green Mushroom]

I can easily see capitalism becoming better, but I would have no ideas on how to replace it. I do prefer what I call "Main Street Capitalism" over what I call "Wall Street Capitalism," where mom and pop stores and small factories are favored over mega corporations as well as keeping the money in the hands of people who actually do the work as opposed to funneling the money into "job creator's" bank accounts and Wall Street bonuses.

Though I once read about a system in some ancient culture where the entire economy centered around meeting the king's needs and every was basically his employee. (Grossly oversimplified) I could live in that system if I get to be the king.

 

[stj]

Capitalism can't be reformed. Every partial stabilization within a single country is undermined by changes in world economy. Capitalism as a world system cannot be made into a true global polity withou creating a global empire because capitalists rely on their national state to defend their property, which means repress the workers. The clash of nations advancing their bourgeoisie's interests is called "war." Between this murderous imperative and capitalism's inability to either regulate population or to rationalize its ecological interventions, the continued triumph of capitalism will lead to new forms of barbarism.

Also, China is heading both for a major economic collapse and a ferocious civil war that will kill millions. No doubt this will be regarded as a small, small price to pay. Anti-Communists have always regarded the deaths of millions in their crusade with great self-satisfaction.

 

[Gov Kodos]

Also, China is heading both for a major economic collapse and a ferocious civil war that will kill millions. No doubt this will be regarded as a small, small price to pay. Anti-Communists have always regarded the deaths of millions in their crusade with great self-satisfaction.

So did Stalin, Lenin, Pol Pot, Mao, anyone caring more for an ideology or belief over people. That has plagued humanity.

 

[horatio83]

All liberal Western democracies feature mixed economies. Just take a look at government spending over GDP ratios.
I am not an anti-capitalist precisely because the problem cannot be captured via this one-dimensional "how capitalist and how socialist should our nation be?" categorization. Take the bank bail-out, it was socialism. Sure, socialism for the rich, lemon socialism, only losses have been socialized, but it was nonetheless socialism. What happened a few years ago in Iraq has also been socialism, for Halliburton and so on. Right-wingers might bitch about socialism but they gladly apply it when it benefits themselves.
China, the country which is capitalist and communist at the same time (of course right-wingers call it communist while left-wingers call it capitalist but de facto it is both at the same time), also neatly illustrates why this categorization game is useless.

The problem is not capitalism but the increase of political power of capital and our lackadaisical response ... especially on the left. The enemy are Third Way social democrats (being myself to some degree also a conservative social democrat I am here basically saying that I am myself the enemy which is nothing paradoxical; unless one is a fascist who can play the antisemitic game of blaming an outsider the enemy is always oneself) whose historic crime has been to give legitimacy to the Thatcher and Reagan revolutions.
I don't remember where, he writes too much, but Joe Stiglitz neatly pointed out that in a hypothetical world without boundaries the political power of capital relative to labour would decrease, if just for tax incidence reasons (if you tax capital today all that happens is that it leaves the country such that the net rate of return remains equal but with less capital the workers are of course less productive, i.e. capital taxation mainly leads to wage decreases because capital is internationally far more flexible than labour).

 

[EmoBorg]

Capitalism now days has become about making money from manipulating the stock market rather than actually creating and marketing a new product. Hedge funds only benefit those who invest in them and those are normally the rich type. Hedge funds basically try to squeeze more profit for the investors without considering how to run a good business that benefits both the workers and the clients who uses the business's services or products. We definitely need laws to protect us from such crony capitalism practices.

If such practices continues, Capitalism will be digging her own grave.

 

[horatio83]

Hedge funds are simply a form of flexible fund that can a) invest in different asset types and b) go short on safe assets to increase the risk and expected rate of return.
I fail to see why this should cause any problem. If people wanna give their money to an intransparent high risk, high return fund they should be allowed to be so utterly stupid.

I have never understood this general rage against financial capitalism and particular instruments like hedge funds or derivatives during the financial crises.
The collusion between rating agencies and banks has been (and will once again be) the main problem which required two responses, to put all the mastercriminals behind bars and to heavily supervise and regulate (who watches the watchers?) or socialize the rating agencies. Of course this is not feasible as these very people basically rule us.
As I said, (financial) capitalism is not the problem, the political power of capital is.

I agree that anarcho-capitalism undermines itself. Keynes was totally right when he called his General Theory "mildly conservative", social democratic efforts that attempt to moderate the excesses of capitalism are not merely making everybody better off but also stabilizing the system politically, preventing that other options (in the first half of the 20th century namely communism and fascism) appear on the table. So conservatives are actually radical while social democrats are conservative.

 

[cooleddie74]

Also, China is heading both for a major economic collapse and a ferocious civil war that will kill millions. No doubt this will be regarded as a small, small price to pay. Anti-Communists have always regarded the deaths of millions in their crusade with great self-satisfaction.

So did Stalin, Lenin, Pol Pot, Mao, anyone caring more for an ideology or belief over people. That has plagued humanity.

Absolutely. Pinning inhumanity and brutality on just one side is both profoundly ignorant of history and, for lack of a better term, partisan. The ruthless, sometimes savage totalitarian and collectivist regimes of the 20th century that ruled over their people with the sword and the secret police hardly have a better track record of civilization and respect for mankind than the unbridled free market.

 

[Robert Maxwell]

An economic system that properly accounts for externalities will probably be necessary in the not-too-distant future. Increasing energy demands coupled with shrinking finite sources (e.g. fossil fuels) and overall environmental impacts (e.g. climate change) will require some kind of cost accounting, either via taxation (in a capitalist system) or through true energy accounting and rationing (in a technate.)

I think capitalist systems are fatally flawed for the reasons others have described, but also because the public policy side of capitalism trends toward a focus on short-term results over long-term sustainability. Criticism of the financial sector is based on precisely this.

Capitalism is, obviously, materially superior to previous systems. It enabled the explosive growth of the 20th century. However, it must continually be restrained for the sake of sociopolitical stability, and those who benefit the most in capitalist systems constantly agitate against this.

My "ideal" form of capitalist system is one with highly progressive income tax rates, no distinction between income and capital gains, a strong social safety net with no arbitrary time limits, and active government investment in promising cutting edge industries. There is this weird myth in American politics that the government can either help the less fortunate or help business, but it can't do both. This is nonsense. We need to have a system in which losing your job does not mean you then lose your health insurance, your home, your savings, and everything you've worked for in your life--which is the reality for a great many people, due to our flimsy social safeguards. If fixing that means GDP growth is slowed and unemployment is a few points higher, I think that's acceptable, since being unemployed in that context doesn't mean you are one unexpected bill away from destitution. On the business side, the focus should be on growing new industries that can't be easily exported to places like China. That means high-margin specialty goods and professional services. Help foster those with tax abatements and loan guarantees.

I am a big fan of the way they do things in Germany and I think we could learn a lot from them.

If capitalism is to be replaced with anything in the relatively near future (~100 years), my money would be on a technate, which I think I've said before around here.

 

[E-DUB]

Any political or quasi-political debate must begin with a defining of terms, so that when people use the same words they mean the same things by them. If we permit "Capitalism" to be defined as "The economic system that lets me and those like me make as much money as we can" and "Socialism" as "anything that gets in the way of that" we have problems.

Under "pure" capitalism, the big fish eat the little fish until there are no little fish left and one entity ends up running everything, the government included. Good for them, not so much so for everybody else.

I favor a system that I've come to call "socially-responsible capitalism", which is not socialism any more than the "socialism with a human face" advocated by Dubcek in 1968 Checkoslovakia was capitalism. It was, however, enough of a threat to the Stalinists in Moscow for them to send in the troops.

"Capitalism" has it's Stalinists as well, they're just a little more subtle.

 

[horatio83]

I am a big fan of the way they do things in Germany and I think we could learn a lot from them.

Not really. Of course the welfare state is better in Europe but the US has historically always been far more open to moderating the business cycle (you had FDR and the New Deal, we had Brüningian austerity and then Hitler) and Obama's stimulus, despite being far too small, was still larger than anything that happened on this side of the big pond. German anti-Keynesianism wreaks havoc in Europe, leading to two-digit unemployment rates and youth unemployment rates (right when the babyboomer generation is retiring) between 10% and 50%.

Smoothing the business cycle and fighting unemployment is the first duty, caring about people who are out of work the second. Why? Because the first issue is crystal clear, there is nothing bad about ensuring a high employment rate via increasing public demand during recessions. Yet the second does contains some trade-offs, unemployment insurance, universal health care and so on do decrease work incentives.

You want to help people escape the vicious cycles of unemployment, loss of self-esteem, depression and so on but any help has positive and negative effects so it is better to prevent unemployment in the first place. I think more and more that a decent constitution should contain the right to work.

 

[Robert Maxwell]

I am a big fan of the way they do things in Germany and I think we could learn a lot from them.

Not really. Of course the welfare state is better in Europe but the US has historically always been far more open to moderating the business cycle and Obama's stimulus, despite being far too small, was still larger than anything that happened on this side of the big pond. German anti-Keynesianism wreaks havoc in Europe, leading to two-digit unemployment rates and youth unemployment rates (right when the babyboomer generation is retiring) between 10% and 50%.

Smoothing the business cycle and fighting unemployment is the first duty, caring about people who are out of work the second. Why? Because the first issue is crystal clear, there is nothing bad about ensuring a high employment rate via increasing public demand during recessions. Yet the second does contains some trade-offs, unemployment insurance, universal health care and so on do decrease work incentives.

You want to help people escape the vicious cycles of unemployment, loss of self-esteem, depression and so on but any help has positive and negative effects so it is better to fight unemployment in the first place.

Why can't you fight both at the same time? You shave a couple percentage points of the unemployment rate through Keynesian stimulus, that's great, but at the same time you've left the remaining unemployed to drown in misery. Long-term unemployment, as it currently exists in the US, is not something people recover from easily--if they recover at all. We should do whatever is possible to soften that blow while at the same time encouraging hiring.

It sounds like you are saying the government can't multitask. Why not?

 

[RandyS]

Of course it could. The real question then becomes "replaced with what?"

One option is the barter system, but that has problems of it's own.

Another one is people suddenly giving out of the goodness of their hearts, but I wouldn't plan on THAT happening all at once anytime soon. There's no such thing as something for nothing.

 

[Robert Maxwell]

Of course it could. The real question then becomes "replaced with what?"

One option is the barter system, but that has problems of it's own.

Another one is people suddenly giving out of the goodness of their hearts, but I wouldn't plan on THAT happening all at once anytime soon. There's no such thing as something for nothing.

Neither of those options are going to happen, nor should they.

 

[horatio83]

Why can't you fight both at the same time? You shave a couple percentage points of the unemployment rate through Keynesian stimulus, that's great, but at the same time you've left the remaining unemployed to drown in misery. Long-term unemployment, as it currently exists in the US, is not something people recover from easily--if they recover at all. We should do whatever is possible to soften that blow while at the same time encouraging hiring.

It sounds like you are saying the government can't multitask. Why not?

Gee, I am one of the guys on the left who is for stuff like basic income so I am not opposed in any way to the welfare state. We have overdone it a bit in Europe in the past but you guys are certainly in dire need of more and not less welfare.

All I am trying to say is that social security destroys work incentives whereas expansive monetary and fiscal policy are relatively unproblematic unless you drive up inflation expectations or don't reduce your public debt in the boom. The forme issues is also ideologically hotly debated whereas the latter is more of a technical macroeconomic issue. Sure, the stimulus has also been pissed upon by the right and there are the lunatic zero-inflation libertarians but precisely because it is about fairly technical stuff it is not as ideologically mined as a more concrete issue like food stamps.