What would you change about Capitalism?

[BananaMangoSmoothie]

What do you mean what would you change about Captalism? What we have now is not true capitalism. It's crony capitalism.

A true free market regulates itself, not by outside forces like governments making idiotic regulations and having a monopoly on the money supply which only hinders trade and hinders the economy from thriving.

[fiby41]

For example of a real life co-operative than turned India into the largest milk producer in the world search Amul Co-op and Operation Flood.

https://en.m.wikipedia.org/wiki/Operation_Flood

I would like to change democracy about capitalism. Replacing the Legislative branch with Plato's Guardians. But voting will still be there, just the options will be limited to those Philosopher Kings who complete their education successfully. This will be decided by examinations held by existing Guardians.

If you don't know what I'm talking about read The Republic: http://www.iep.utm.edu/republic/

The main purpose of this is:

1 Plato believed that people cannot decide their leader rationally. But educating the entire populace as Plato wants it is futile/not worth it. So we instead educate the legislators and let them reduce the number of options available to general public.

Luckily some countries don't have a problem with reduced choices as evident from their bipartisan politics.

2 By being outside of the economy in a sense, they can make impartial decisions concerning 'the greater good' and focus on the longer time frame instead of the politician who has no reason to think about anything but the next electoral term

(having one years worth of grain, water, cloth etc in reserve, the trading class cannot sabotaged the Guardian's work

Free from kanak kanta: gold/money/worldly possessions and marriage

etc)

3 Machiavelli says certain awe derived from fear or respect should be there in the population for the ruler for them to cooperate when difficult decisions are to be implemented with no immediate results in sight

Knowing that the Guardians have a different role to play in the society than us, and that Guardians have made the 'sacrifice' and 'paid the price' and are elected, will reduce stupid mistakes being made again and again just because the happen to be popular.

All in all, theoretically, aligning the personal interest of the ruling class to the political interest of the state and making the ruling class educated in the right subjects should reduce the instances of 'history repeating itself.'

...How I will accomplish this? I'll probably have to conquer some part of the world to try this out. Added to my bucket list, now just let me FI somehow first.

[OldPro]

For me the answer is simple, an actual free market system. That is far from what we have today.

As it happens, my birthplace was the same town as that of Adam Smith, often referred to as the 'Father of capitalism' or the 'Father of the free market system'. I don't think anyone can discuss capitalism or the free market system without having read his book, "An Inquiry into the Nature and Causes of the Wealth of Nations. (often shortened to just 'Wealth of Nations.')

BananaMangoSmoothie while having a name that takes up too many letters, has got it right when writing,

What do you mean what would you change about Captalism? What we have now is not true capitalism. It's crony capitalism.

A true free market regulates itself, not by outside forces like governments making idiotic regulations and having a monopoly on the money supply which only hinders trade and hinders the economy from thriving.

What I would change, is to RETURN to actual capitalism.

[steveo73]

To paraphrase Winston Churchill, its the worst economic system ever invented -- except for all the other ones.
....
So I also think that searches for perfect economic systems are a waste of time at best, and a utopian nightmare at worst.

I think that this is exactly how I feel. I'd love to see the price of a good accurately reflect its true cost but that requires government intervention and its what happens now anyway. It doesn't happen perfectly but it never will.

Capitalism also doesn't work perfectly - who would pay for roads and hospitals and research and all sorts of stuff that is required but isn't necessarily profitable.

We need a form of modified capitalism. It will never be perfect.

[BananaMangoSmoothie]

To paraphrase Winston Churchill, its the worst economic system ever invented -- except for all the other ones.
....
So I also think that searches for perfect economic systems are a waste of time at best, and a utopian nightmare at worst.

I think that this is exactly how I feel. I'd love to see the price of a good accurately reflect its true cost but that requires government intervention and its what happens now anyway. It doesn't happen perfectly but it never will.

Capitalism also doesn't work perfectly - who would pay for roads and hospitals and research and all sorts of stuff that is required but isn't necessarily profitable.

We need a form of modified capitalism. It will never be perfect.

Who would pay for roads etc? Well, i recommend you read the book "The privatization of roads and highways" by Walter Block

[Dragline]

For me the answer is simple, an actual free market system. That is far from what we have today.

As it happens, my birthplace was the same town as that of Adam Smith, often referred to as the 'Father of capitalism' or the 'Father of the free market system'. I don't think anyone can discuss capitalism or the free market system without having read his book, "An Inquiry into the Nature and Causes of the Wealth of Nations. (often shortened to just 'Wealth of Nations.')

You forgot the other half. Adam Smith viewed his work "The Theory of Moral Sentiments" as more important and fundamental to the understanding of his later work, the "Wealth of Nations", which dealt more with the mechanisms of trade. This is why both works are referenced on his tombstone, per his instructions.

The former is actually the better book. Smith understood that humans are not automatons driven by self-maximizing programming, but have natural inclinations to empathy (which he referenced as "sympathy", since the word "empathy" was not invented until the next century.) He was well ahead of his time.

Except for the labor theory of value, which culminated in Marxism. But most theories end in dead ends. Hence, the adage, "the dustbin of history".

[jennypenny]

Russ Roberts wrote a book on Smith and has several good podcasts on this topic (search econtalk.org). I recall one that discussed Smith and how people act one way in social interactions and another in impersonal transactions, and how that affects economic systems.

I think many of the ills attributed to capitalism actually stem from excessive consumerism. We used to define "good" in relation to the consumer in terms of value, but now we define it in terms of cost. I suspect the shift occurred because cost is easier to measure, but I think the system is a little soulless without those immeasurable components.

[steveo73]

To paraphrase Winston Churchill, its the worst economic system ever invented -- except for all the other ones.
....
So I also think that searches for perfect economic systems are a waste of time at best, and a utopian nightmare at worst.

I think that this is exactly how I feel. I'd love to see the price of a good accurately reflect its true cost but that requires government intervention and its what happens now anyway. It doesn't happen perfectly but it never will.

Capitalism also doesn't work perfectly - who would pay for roads and hospitals and research and all sorts of stuff that is required but isn't necessarily profitable.

We need a form of modified capitalism. It will never be perfect.

Who would pay for roads etc? Well, i recommend you read the book "The privatization of roads and highways" by Walter Block

I don't think it would work. There are certain items with society that people in general won't pay for or don't value and that is why some government intervention is required.

[BananaMangoSmoothie]

I think that this is exactly how I feel. I'd love to see the price of a good accurately reflect its true cost but that requires government intervention and its what happens now anyway. It doesn't happen perfectly but it never will.

Capitalism also doesn't work perfectly - who would pay for roads and hospitals and research and all sorts of stuff that is required but isn't necessarily profitable.

We need a form of modified capitalism. It will never be perfect.

Who would pay for roads etc? Well, i recommend you read the book "The privatization of roads and highways" by Walter Block

I don't think it would work. There are certain items with society that people in general won't pay for or don't value and that is why some government intervention is required.

Sounds like a personal incredulity to me. Afer all, toll roads do already exist. Not to mention people already pay private companies for electricity, internet, security etc.

[steveo73]

Who would pay for roads etc? Well, i recommend you read the book "The privatization of roads and highways" by Walter Block

I don't think it would work. There are certain items with society that people in general won't pay for or don't value and that is why some government intervention is required.

Sounds like a personal incredulity to me. Afer all, toll roads do already exist. Not to mention people already pay private companies for electricity, internet, security etc.

I get your point. I just don't believe that a capitalist system without government intervention would lead to the best outcome for society. I think you need some intervention.

[OldPro]

" Smith understood that humans are not automatons"

Good point Dragline. The problem is that people today are not the same as people were in Adam Smith's day and some of his thinking is dated because of that. People today behave differently than they did in the past which makes Smith's ideas of how they would behave no longer true. https://www.veraworks.com/sites/default ... k=_sg0z_j5

I think today, the balance between a desire to serve others vs. self-serving behaviour, is not the same as it was in the past for the majority of people. We live in the world of the 'ME generation'.

I've been to his grave in Edinburgh several times by the way Dragline. I follow the custom of leaving a small pebble on his gravestone even though it is a borrowed (for me) custom. There are always quite a few pebbles on it which indicate to me that there may be a surprising number of people who visit every year.

Re consumerism jennypenny, I agree and that does lead me to one change I would like to see (but won't since it isn't going to happen, it's just wishful thinking). Before Edward Bernays (sometimes referred to as the Father of Modern Advertising as Smith is the Father of the free market), people actually bought things based primarily on need. In the 20th century advertisers invented 'mass marketing' based on being able to get people to buy based on wants rather than needs. Consumerism has never stopped growing since then.

Imagine if such advertising were illegal. Now there is a change I would love to see but never will. You could advertise that 'these jeans are hard wearing and will last longer than inferior material in a work environment.' You could not advertise, 'these designer jeans will make you look sexy and get you a boyfriend/girlfriend.'

[OldPro]

This: http://i.nordstromimage.com/images/Stor ... _ads_8.jpg

Not this:https://s-media-cache-ak0.pinimg.com/73 ... 096f42.jpg

https://s-media-cache-ak0.pinimg.com/73 ... 096f42.jpg

[BananaMangoSmoothie]

" Smith understood that humans are not automatons"

Good point Dragline. The problem is that people today are not the same as people were in Adam Smith's day and some of his thinking is dated because of that. People today behave differently than they did in the past which makes Smith's ideas of how they would behave no longer true. https://www.veraworks.com/sites/default ... k=_sg0z_j5

I think today, the balance between a desire to serve others vs. self-serving behaviour, is not the same as it was in the past for the majority of people. We live in the world of the 'ME generation'.

I've been to his grave in Edinburgh several times by the way Dragline. I follow the custom of leaving a small pebble on his gravestone even though it is a borrowed (for me) custom. There are always quite a few pebbles on it which indicate to me that there may be a surprising number of people who visit every year.

Re consumerism jennypenny, I agree and that does lead me to one change I would like to see (but won't since it isn't going to happen, it's just wishful thinking). Before Edward Bernays (sometimes referred to as the Father of Modern Advertising as Smith is the Father of the free market), people actually bought things based primarily on need. In the 20th century advertisers invented 'mass marketing' based on being able to get people to buy based on wants rather than needs. Consumerism has never stopped growing since then.

Imagine if such advertising were illegal. Now there is a change I would love to see but never will. You could advertise that 'these jeans are hard wearing and will last longer than inferior material in a work environment.' You could not advertise, 'these designer jeans will make you look sexy and get you a boyfriend/girlfriend.'

I loved the book 'Propaganda' by Edward Bernays.

I'm a bit confused though, on what moral basis would you make such advertising illegal? It seems as though it's just an aesthetic preference rather than something linked to any moral first principles. Arbitrary laws based on preference rather than moral principles is what's hurting society imo.

[Dragline]

Yes, Bernays's techniques combined with mass media fairly well "creates" the backdrop of the society we live in. Here's an amusing recent podcast about him -- kind of superficial, but entertaining: http://www.stuffyoushouldknow.com/podca ... ons-works/

I disagree with this statement of OldPro: "The problem is that people today are not the same as people were in Adam Smith's day and some of his thinking is dated because of that. People today behave differently than they did in the past which makes Smith's ideas of how they would behave no longer true."

I don't humans have actually changed very much in thousands of years. Unless they make a real conscious effort, people are still driven by primarily primate behaviors, especially the desire to have what other people have (or at a more abstract level, to desire what others desire and become them), which drives consumerism. This is why ancient stories like Aesop's fables still make sense to us. (And Oedipus.)

What has changed is our technology and the manner in which people live -- we now know a hell of a lot more about what other people have or at least what we think they have, which often proves to be a bad environment for humans due to the anxiety and irrational desire to accumulate it provokes. Great genetic strategy when food is scarce -- not so great these days when you can literally hoard yourself to death.

[Bismarck]

One thing I'd change about capitalism as it is in the US is allowing failure. Actual capitalism allows for this, but we've moved away from it. Certain banks and GM should have been allowed to die. Newer, better companies would have filled the void, likely a little more cautious.

"Capitalism without losers is like Catholicism without hell. It doesn't work"

[Dragline]

I thought this was an interesting take on this subject: https://www.youtube.com/watch?v=Yh_hRS15n_8

Although I don't know that capitalism, or any other economic system for that matter, could address the higher needs on the Maslow pyramid.

[BRUTE]

Although I don't know that capitalism, or any other economic system for that matter, could address the higher needs on the Maslow pyramid.

if humans didn't have to spend their entire lives working for survival (shelter, food), they would have plenty of time to pursue creative endeavors and climb the maslow pyramid. hang out with friends, family.

brute thinks the contribution of capitalism could be to make people so productive and rich that they could spend less of their time surviving, and more doing stuff they actually want to do. like ERE does, in a way.

[Dragline]

brute thinks the contribution of capitalism could be to make people so productive and rich that they could spend less of their time surviving, and more doing stuff they actually want to do. like ERE does, in a way.

This was a popular theory of economists back in the 1920s. (Can't remember the principal proponent of it at the moment -- might have been Keynes, but the idea was well-accepted). It was thought that as it became easier to meet basic needs, people would start working less and spend more time on other pursuits. But it did not work out that way -- instead people tend to sieze the opportunity to work more, make more and buy more shit. And excess consumption was encouraged by marketers and became the norm, creating this really weird idea of "a duty to consume", among other really weird modern ideas.

The fact that it didn't pan out the way as forecast really tells you two things: (1) on an individual level, the rational actor assumption underlying most economic theories is of dubious validity and the theories themselves are of limited usefulness when it comes to individual satisfaction with life; (2) the anthropological theory of mimises -- that left to their own primitive yearnings, humans are prone to copying one another down to copying what other people desire (keeping up with the joneses and envy about what others have on display). This makes a lot of sense, because the trait is shared with other primates and mammals, and is favorable in terms of survivorship/evolutionary characteristics.

It takes conscious effort to avoid falling into the trap of (2) which is the unconscious inclination. This is fundamentally what we are talking about here (ERE).

The idea is ancient and incorporated into many old teachings -- consider the Buddhist idea that desire is the root cause of suffering and the Judeo-Christian rule that "thou shalt not covet". Yet predictably quite difficult for most people to follow, as it is not their natural inclination.

[BRUTE]

most people covet indeed.

but brute disagrees with your 1). this does not show that the rational actor assumption is wrong, because this assumption wasn't even there. in brutes opinion, the critique of the rational actor theory has always been a straw man. no economist brute has read ever claimed that humans were hyperrational, or rational at all.

what it might show is that people were thought to value leisure more than consumption, but they don't. to no small degree influenced by the mimises effect as you call it, and the marketing/consumerism mechanisms you mentioned.

what it does show in brutes opinion is that humans are not individuals to the degree they often believe they are. sure, each one is a bit of an individual, but statistically, humans often behave like herd animals.

but this isn't a failure of capitalism, in brutes eye. capitalism is about the distribution of resources and efforts in society by means of a pricing system, as opposed to other methods (central planning in communism, expert knowledge in a technocracy, voting in a democracy). an economic system by itself usually does not tell people what to want. while we do definitely have a system in place that tells people what to want (consumerism), brute does not think this is directly resultant of capitalism - while it is definitely built on top of it, and the current economy is completely based on it.

[Dragline]

but brute disagrees with your 1). this does not show that the rational actor assumption is wrong, because this assumption wasn't even there. in brutes opinion, the critique of the rational actor theory has always been a straw man. no economist brute has read ever claimed that humans were hyperrational, or rational at all.

Not sure which ones you have been reading or what assumptions they have implied -- but every economic theory has assumptions built into it and if you don't know what they are, you don't understand the applications or limits of the theory. Without the assumptions, mathematical models cannot be constructed. Most economists freely acknowledge this limitation and many have focused upon this problem within the subject matter.

For good critiques of the subject of assumptions in economics, I would suggest "Debunking Economics" (S. Keen) and "Quasi-Rational Economics" (R. Thaler 1994) or "Misbehaving: The Making of Behavioral Economics" (R. Thaler 2015). [Also "Thinking, Fast and Slow" (D. Kahneman),although its not strictly on topic.]

Summary of the 1994 book: "Standard economics theory is built on the assumption that human beings act rationally in their own self interest. But if rationality is such a reliable factor, why do economic models so often fail to predict market behavior accurately? According to Richard Thaler, the shortcomings of the standard approach arise from its failure to take into account systematic mental biases that color all human judgments and decisions." http://www.amazon.com/Quasi-Rational-Ec ... 331&sr=1-4

The assumption is there. Attempting to deny it or casting it off as a straw man is not a rational argument, but perhaps a symptom of cognitive dissonance.

Happy to consider any authorities in response, but your ipse dixit ("it is, because I say it is and is what I know") is exhausted.