Is Capitalism Doomed?

nesf

An interesting and balanced enough article: http://www.project-syndicate.org/commentary/roubini41/English

The massive volatility and sharp equity-price correction now hitting global financial markets signal that most advanced economies are on the brink of a double-dip recession. A financial and economic crisis caused by too much private-sector debt and leverage led to a massive re-leveraging of the public sector in order to prevent Great Depression 2.0. But the subsequent recovery has been anemic and sub-par in most advanced economies given painful deleveraging....

I found this analysis quite interesting, if not particularly technical so not that convincing. What do people think of his prescription of higher taxes and fiscal discipline for low tax economies and lower tax and reigning in of spending for the heavy tax and spend economies? I think his thinking is broadly persuasive in that we have an issue with lower tax economies just not running the fiscal systems needed to match their spending while higher spending economies seem to be painting themselves into a nasty corner with an aging population meaning heavier strains on their spending programs with lower tax revenues.

RichardAnd

Alot of the huge over spends in state budgets across the western world were created by socialist, not capitalist policy.

CiaranC

Didnt take long. As soon as a negative effect of our capitalist system pops up, its simply ascribed as "not capitalism". Exactly like as soon as a negative aspect of state socialism popped up in the USSR, it wasnt "true socialism".

This thread will now be filled with those who "understand capital". Unfortunately for them, moving money around and betting on its value tomorrow is hardly a sustainable economic model.

matthew8

CiaranC wrote: »

Didnt take long. As soon as a negative effect of our capitalist system pops up, its simply ascribed as "not capitalism". Exactly like as soon as a negative aspect of state socialism popped up in the USSR, it wasnt "true socialism".

This thread will now be filled with those who "understand capital". Unfortunately for them, moving money around and betting on its value tomorrow is hardly a sustainable economic model.

Tell me, how is overspending capitalist? Is it capitalist to interfere in the business of a private organisation?

RichardAnd

CiaranC wrote: »

Didnt take long. As soon as a negative effect of our capitalist system pops up, its simply ascribed as "not capitalism". Exactly like as soon as a negative aspect of state socialism popped up in the USSR, it wasnt "true socialism".

This thread will now be filled with those who "understand capital". Unfortunately for them, moving money around and betting on its value tomorrow is hardly a sustainable economic model.

I didn't say anything negitive about socialism, nor did I say that capitalism is flawless. I simply pointed out the very obvious truth that it was populist socialist policies that led to the modern welfare state that has been a huge part of over spending in economies of the west.

I've always tred a middle line between left and right because neither are perfect and either taken to extremes will be the ruination of the system that employs them. In this case, I just wanted to verify that much of what the OP mentioned with regards to over spending is, in this case, due to socialist ideals. Borrowing billions to take part in a world wide poker game is a form of extreme capitalism with equally dire consequences.

Please don't attempt to label me on the basis of one sentence.

Suryavarman

The two economies with the lowest taxes and regulations on the planet are Hong Kong and Singapore, which grew at rates of 6% & 15% respectively in 2010. Hong Kong ran a budget surplus equal to 4% of GDP and Singapore ran a deficit equal to 1.85% of GDP. Neither of these countries sound like they serious revenue or growth problems.

Whereas western nations have been running huge budget deficits and setting artificially low interest rates since the end of the bubble. These efforts have merely created another bubble which looks likely to burst within a few months.

None of this would seem to indicate a failing on the part of Capitalism. It would seem that blame rests entirely on the shoulders of Government. To claim that Capitalism is doomed is a very naive statement to make.

Permabear

This post has been deleted.

nesf

Suryavarman wrote: »

The two economies with the lowest taxes and regulations on the planet are Hong Kong and Singapore, which grew at rates of 6% & 15% respectively in 2010. Hong Kong ran a budget surplus equal to 4% of GDP and Singapore ran a deficit equal to 1.85% of GDP. Neither of these countries sound like they serious revenue or growth problems.

Neither are mature economies really. Give them another 50 years before judging them. Ditto for China and India, both are young democracies.

nesf

Permabear wrote: »

This post had been deleted.

I think the article works off the assumption that you cannot separate Government actions from the Market when talking about Capitalism and this is somewhat true, modern economies in practice are managed economies to greater or lesser extents and this does not look like changing given voting patterns. Thus it makes sense when one talks about capitalism to talk about the entire system, Government and Market rather than focusing solely on the Market as if the Government did not exist.

Permabear

This post has been deleted.

Suryavarman

nesf wrote: »

Neither are mature economies really. Give them another 50 years before judging them.

Both have been rich nations for quite some time. That would qualify them as mature economies in my opinion. Why do you choose 50 years? Does that mean we can disqualify Ireland?

Ditto for China and India, both are young democracies.

Young democracies? Does that mean we can disqualify Germany, Italy, Spain and all of eastern Europe from our discussion as well?

Debtocracy

Capitalism worked once but no longer does. Very suprised if it lasts another 20 years. The logical alternative to capitalism would be an economic system which deals with the two main problems that capitalism fails on -

1. Meeting humans needs (Don't need to contribute to society to make a profit; wonderfully illustrated by financial trading which is basically a bunch of men in suits playing computer games).
2. Using the earth's resources in a sustainable way (e.g. building stuff that lasts)

The new economic model would also adapt to advances in science. For instance, it is widely known within scientific circles that a context of performance-related bonuses will reduce the quality of work on a complex task (people will work harder but less creatively or intelligently). The business community (especially banking) is obviously ignorant of such research.

nesf

Suryavarman wrote: »

Both have been rich nations for quite some time. That would qualify them as mature economies in my opinion. Why do you choose 50 years? Does that mean we can disqualify Ireland?

Ireland's entering the mature phase, after catching up with the rest of Europe productivity wise. Low level growth is going to be the average for Ireland from now on. Both Singapore and Hong Kong will hit a wall where neither immigration nor productivity gains allow high rates of economic growth. That's what I mean when I say mature.

Suryavarman wrote: »

Young democracies? Does that mean we can disqualify Germany, Italy, Spain and all of eastern Europe from our discussion as well?

You can exclude Western democracies for the most part because their economies are at the leading edge of productivity growth (i.e. the slow part). Eastern European economies have much greater scope for growth than the rest of Europe similar to how Ireland was in the 1970's. India and China, especially India, have much greater scope again for productivity growth meaning much greater natural scope for economic growth than older capitalist economies like those in Western Europe and to a lesser extent the US.

This is basic economic growth theory, economies which can grow very quickly will be the ones that lag productivity wise or have greater scope for immigration. More mature economies have already gone through this phase and no longer have a large percentage of the population in low productivity areas of the economy or much scope for large scale population growth. Edit: Oh and demographic shifts in the economy altering the labour market can also impact growth both positively and negatively.

nesf

Permabear wrote: »

This post had been deleted.

But we are basically stuck with managed economies due to voting patterns in most Western democracies, so the question becomes how best to alter the current management techniques to best keep things stable.

sarumite

Suryavarman wrote: »

The two economies with the lowest taxes and regulations on the planet are Hong Kong and Singapore, which grew at rates of 6% & 15% respectively in 2010. Hong Kong ran a budget surplus equal to 4% of GDP and Singapore ran a deficit equal to 1.85% of GDP. Neither of these countries sound like they serious revenue or growth problems.

They are also pretty much cities...If London or Paris was to become independent you would probably find them financially much better off in the long term.

Suryavarman

nesf wrote: »

Ireland's entering the mature phase, after catching up with the rest of Europe productivity wise. Low level growth is going to be the average for Ireland from now on. Both Singapore and Hong Kong will hit a wall where neither immigration nor productivity gains allow high rates of economic growth. That's what I mean when I say mature.

Considering both Hong Kong and Singapore are among the richest countries in the world and richer than Ireland, would suggest that they are also more productive. Therefore what happens to them now could also happen to Ireland in the future. Per Capita growth for Hong Kong was 6.15% last year and Singapores was 14.07%. Those figure would seem to rule out immigration causing rapid growth. Hong Kong's population and labour force growth has also been slower than Irelands over the last decade.

You can exclude Western democracies for the most part because their economies are at the leading edge of productivity growth (i.e. the slow part). Eastern European economies have much greater scope for growth than the rest of Europe similar to how Ireland was in the 1970's. India and China, especially India, have much greater scope again for productivity growth meaning much greater natural scope for economic growth than older capitalist economies like those in Western Europe and to a lesser extent the US.

This is basic economic growth theory, economies which can grow very quickly will be the ones that lag productivity wise or have greater scope for immigration. More mature economies have already gone through this phase and no longer have a large percentage of the population in low productivity areas of the economy or much scope for large scale population growth. Edit: Oh and demographic shifts in the economy altering the labour market can also impact growth both positively and negatively.

I am aware that eastern European economies can grow faster, I was just making the point that a lot of countries could be ruled out if we were talking about young democracies.

I think I've dealt with everything else in the first part of the post.

nesf

Suryavarman wrote: »

Considering both Hong Kong and Singapore are among the richest countries in the world and richer than Ireland, would suggest that they are also more productive. Therefore what happens to them now could also happen to Ireland in the future. Per Capita growth for Hong Kong was 6.15% last year and Singapores was 14.07%. Those figure would seem to rule out immigration causing rapid growth. Hong Kong's population and labour force growth has also been slower than Irelands over the last decade.

Hong Kong's GDP per capita is around 30K dollars, Ireland's around 55K dollars. Hong Kong has a massive way to catch up to Ireland and other older developed economies. That's why you see so much growth in the economy. It's somewhat similar for Singapore.

See here: http://www.google.ie/publicdata/explore?ds=d5bncppjof8f9_&ctype=l&strail=false&nselm=h&met_y=ny_gdp_pcap_cd&scale_y=lin&ind_y=false&rdim=country&idim=country:HKG:IRL:SGP&ifdim=country&tstart=-295923600000&tend=1281913200000&hl=en&dl=en&icfg&uniSize=0.035&iconSize=0.5

Singapore and Hong Kong can grow very quickly for exactly the same reason Ireland was able to grow so quickly in the mid to late 90s, they have a lot of catching up to do GDP per capita wise with the developed world which means there are a lot of productivity gains to be made. When their GDP per capita hits around the same level as the major developed economies their economic growth will slow dramatically per capita.

ei.sdraob

Doomed to be replaced by what exactly?

nesf

ei.sdraob wrote: »

Doomed to be replaced by what exactly?

Not replaced by anything, just in for a bad ol' time of it.

Dirk Gently

Jasus, you know things are bad when nesf asks if capitalism is doomed.

ei.sdraob

nesf wrote: »

Not replaced by anything, just in for a bad ol' time of it.

"Democracy is the worst form of government, except for all the other"

On the economics side same could be said for capitalism as a form of economy, it is not perfect nor claims to be everything for everyone but it works better than alternatives as is being proven time and time again as various societies decide to experiment

Anyways capitalism has various varieties such as mercentalism or corporatism and so on, and as someone already mentioned what we have/had is not capitalism but a mixed economy with various socialist/populist brainfarts proving to be disastrous.

Suryavarman

nesf wrote: »

Hong Kong's GDP per capita is around 30K dollars, Ireland's around 55K dollars. Hong Kong has a massive way to catch up to Ireland and other older developed economies. That's why you see so much growth in the economy. It's somewhat similar for Singapore.

See here: http://www.google.ie/publicdata/explore?ds=d5bncppjof8f9_&ctype=l&strail=false&nselm=h&met_y=ny_gdp_pcap_cd&scale_y=lin&ind_y=false&rdim=country&idim=country:HKG:IRL:SGP&ifdim=country&tstart=-295923600000&tend=1281913200000&hl=en&dl=en&icfg&uniSize=0.035&iconSize=0.5

Singapore and Hong Kong can grow very quickly for exactly the same reason Ireland was able to grow so quickly in the mid to late 90s, they have a lot of catching up to do GDP per capita wise with the developed world which means there are a lot of productivity gains to be made. When their GDP per capita hits around the same level as the major developed economies their economic growth will slow dramatically per capita.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

In terms of purchasing power both countries are still much richer than Ireland.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

In nominal terms Singapore isn't far off Ireland and according to the CIA it is much richer. It is also richer than Germany, France, the UK and Japan, are none of those four countries developed?

nesf

Suryavarman wrote: »

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

In terms of purchasing power both countries are still much richer than Ireland.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

In nominal terms Singapore isn't far off Ireland and according to the CIA it is much richer. It is also richer than Germany, France, the UK and Japan, are none of those four countries developed?

PPP doesn't mean a whole lot in terms of economic growth since it's versus the larger world economies that growth potential will depend. I was working off 2009 World Bank figures which had their nominal GDPs quite a bit lower and Ireland's a lot higher.

The thing with Singapore, and Hong Kong, is that they can't really be treated as countries, they're more akin to capital cities. They don't have large agricultural sectors that drag down GDP per capita and similar and both are somewhere around 80% of population working in services which is untenable for nearly every economy that isn't a single city or group of cities.

Their growth potential is something similar to the GDP per capita growth potential of London or even Tokyo. In these terms Singapore is a bit more than half the GDP per capita of London and around one-fifth of the GDP per capita of Tokyo (working off 2008 PriceWaterhouseCoopers estimates).

There's nothing magical about economic growth despite what politicians would have you believe. In order to increase GDP per capita one of two things needs to happen, either more people go into the labour force (i.e. the labour force participation percentage increases) or productivity increases through technological change (slow) or sectoral change where people move from low productivity sectors to high ones (say agriculture to manufacturing or low tech manufacturing to high tech manufacturing or whatever). Generally speaking you can only ever manage high levels of growth if you lag behind established economies in some way, be it sectoral, technological or in terms of labour force participation (i.e. women in the workforce).

Liam Byrne

I'd hope that it's consigned to the dustbin, but I'm not optimistic.

Those with vast amounts of money are not going to give up on their nest-egg too easily, regardless of the costs to humanity.

All "isms" are, by their nature, extremes, and all are damaging. We need a measurement of people's true worth - one that isn't related to how much they earn, but what they offer overall to society.

Markets and banks have proven that they can't be trusted, and that was before they ever got bailed out. So what we have at the moment is the worst excesses of greed and capitalism compounded by an idiotic intervention by politicians and vested interests.

That has doubled the damage; what we have at the moment is only 50% caused by capitalism.

Suryavarman

nesf wrote: »

PPP doesn't mean a whole lot in terms of economic growth since it's versus the larger world economies that growth potential will depend. I was working off 2009 World Bank figures which had their nominal GDPs quite a bit lower and Ireland's a lot higher.

PPP does show how much the average wage will get you in the area. Having higher wages means nothing if you can't buy more goods with them and have a better quality of life.

The thing with Singapore, and Hong Kong, is that they can't really be treated as countries, they're more akin to capital cities. They don't have large agricultural sectors that drag down GDP per capita and similar and both are somewhere around 80% of population working in services which is untenable for nearly every economy that isn't a single city or group of cities.

Their growth potential is something similar to the GDP per capita growth potential of London or even Tokyo. In these terms Singapore is a bit more than half the GDP per capita of London and around one-fifth of the GDP per capita of Tokyo (working off 2008 PriceWaterhouseCoopers estimates).

http://en.wikipedia.org/wiki/List_of_cities_by_GDP#Top_5_per_region

According to this London does indeed have a higher GDP per capita but Tokyo doesn't.

nesf

Suryavarman wrote: »

PPP does show how much the average wage will get you in the area. Having higher wages means nothing if you can't buy more goods with them and have a better quality of life.

We're talking about economic growth not quality of life no? Because if we're talking about quality of life I'm talking about something completely different.

Suryavarman wrote: »

http://en.wikipedia.org/wiki/List_of_cities_by_GDP#Top_5_per_region

According to this London does indeed have a higher GDP per capita but Tokyo doesn't.

Eh, Tokyo is way higher, it's got like the highest GDP per capita in the world. Check the numbers again.

nesf

ei.sdraob wrote: »

"Democracy is the worst form of government, except for all the other"

On the economics side same could be said for capitalism as a form of economy, it is not perfect nor claims to be everything for everyone but it works better than alternatives as is being proven time and time again as various societies decide to experiment

Anyways capitalism has various varieties such as mercentalism or corporatism and so on, and as someone already mentioned what we have/had is not capitalism but a mixed economy with various socialist/populist brainfarts proving to be disastrous.

Sure I accept that but from the looks of things politically mixed economies are here to stay over the medium term unless there is a major shock in terms of how people vote. Christ, even in the US the tea party are a fringe movement having their moment in the sun at best.

tweedledee

Capitalism needs greed to grow,world is full of greedy people,capitalism will always be strong.
Comparing Ireland to Singapore or Hk?????Are you serious?????Irish are very lazy and non competative.We create nothing in this country except milk and cheese!!
ireland is a social welfare state rammed full of ungrateful,lazy people.
Whats the welfare like in HK or Singa????
Singaporeans and HKese are focused,rule abiding people,the Irish?????My God I'm not even going to waste my fingers.
Before you even mention our science or computer "industry",majority are foreign owned and managed,and we turn out peanuts compared to Asia.

Suryavarman

Liam Byrne wrote: »

I'd hope that it's consigned to the dustbin, but I'm not optimistic.

Without capitalism we would be resigned to a life of poverty. To wish for it to disappear is quite naive.

Those with vast amounts of money are not going to give up on their nest-egg too easily, regardless of the costs to humanity.

Why should they? If people earn it they should keep it.

Markets and banks have proven that they can't be trusted, and that was before they ever got bailed out. So what we have at the moment is the worst excesses of greed and capitalism compounded by an idiotic intervention by politicians and vested interests.

How can markets not be trusted? They've done exactly what they are supposed to. I would say it's politicians and Government that can't be trusted.

That has doubled the damage; what we have at the moment is only 50% caused by capitalism.

A lot less than 50% of this is caused by capitalism.

nesf wrote: »

We're talking about economic growth not quality of life no? Because if we're talking about quality of life I'm talking about something completely different.

We are talking about economic growth alright. I was just defending my use of PPP earlier.

Eh, Tokyo is way higher, it's got like the highest GDP per capita in the world. Check the numbers again.

GDP: 1,479,000,000,000
Pop: 36,669,000
GDP per capita: $40,335

That's according to my link anyway, if you're using different figures that would explain the difference.



On another note is it just me or have we gone off topic a bit? I'd hate to drag a mod off topic on the second page of his/her own thread :P

nesf

Suryavarman wrote: »

On another note is it just me or have we gone off topic a bit? I'd hate to drag a mod off topic on the second page of his/her own thread :P

We're way off topic, discussing economic growth is a personal weakness of mine. It's a really simple topic that's been woefully mysticised by years of Government rhetoric.

tweedledee

Isn't bailing out private institutions,"BANKS",using taxpayers money anti/counter capitalism???????:eek:
Its the complete opposite of everything capitalism stands for!!!
Capitalism is super when the wealthy are enjoying all the trappings,but when cracks appear in the deeply flawed system the wealthy use socialism or nationalisation to save them???????And then when their funds have beeen protected,using taxpayers money ,its all back to ehh,Capitalism again!!
Capitalism is a system created by the wealthy for the wealthy,feeding the faint possibility to the working class that maybe someday they too might get rich.
Capitalism and Greed go hand in hand.

ei.sdraob

What you just described are results of government intervention and goes against the very definition of the concept

Capitalism is an economic system in which the means of production are privately owned and operated for profit, usually ideally! in competitive markets

The Scientician

tweedledee wrote: »

Comparing Ireland to Singapore or Hk?????Are you serious?????Irish are very lazy and non competative.We create nothing in this country except milk and cheese!!

Software, pharmaceuticals, etc. too. We have a healthy enough export market.

tweedledee

EI the "government" intervention was at the request of the banks owners!!wealthy bank owners who saw the possibility of their banks going bust begged the government for taxpayers money.Again these people are capitalists when they making lots of money,but completely the opposite when they in trouble.
You could count on one hand the amount of Irish,non-food companies making a profit here.Most foreign offices here are for tax reasons,nothing else.They get huge support from the Gov to put offices here to make it look like Ireland is busy,its simple tax avoidance.

jimmycrackcorm

Capitalism is not doomed simply because there is nothing that can actually replace it. There are no shortage of ideas though but nothing that can replace it in any practical sense.

However when it comes to financial systems then our present system is doomed but can transition over to other models.

johnnyskeleton

nesf wrote: »

An interesting and balanced enough article: http://www.project-syndicate.org/commentary/roubini41/English




I found this analysis quite interesting, if not particularly technical so not that convincing. What do people think of his prescription of higher taxes and fiscal discipline for low tax economies and lower tax and reigning in of spending for the heavy tax and spend economies? I think his thinking is broadly persuasive in that we have an issue with lower tax economies just not running the fiscal systems needed to match their spending while higher spending economies seem to be painting themselves into a nasty corner with an aging population meaning heavier strains on their spending programs with lower tax revenues.

It is as foolish to think that capitalism is doomed because we are in the middle of a depression as it is to think that capitalism is a miracle when we are at the height of a boom.

These are necessary parts of capitalism. Since 1945 economies have tried to stave off the worst of each of these by saving during a boom and spending during a recession, but in the 90s several countries thought it might be fun to to do the opposite and spend in an already overheated economy. Well we are learning the lesson from that, and capitalism will take this experience and learn from it. As it always does.

lmimmfn

I hope i dont get banned for this lol( its tin foil hat stuff but still ), but is it mere coincidence that:
1. Tea Party rejects Obamas proposals
2. Results in degrading of the US to AA+ due to last minute agreement and not total agreement.
3. Impacts EU stock markets( and global ones )
4. Merkel and Sarkozy announce announce tighter fiscal policy and effectively a central european economic government.

2 above means the US have devalued Chinas dollars( china is artifically keeping their currency low, the only way to affect that is if the dollar is devalued ), 4 means more european central control for Germany/France which is what they wanted all along anyway.

I dont know, but it does seem to be a bit of a coincidental setup.

/takes off tin foil hat

Solair

It's hard to tell as what we are witnessing at present isn't capitalism, nor is it socialism, it's some kind of cronyism, corporatism and state-sponsored protectionism taken way too far.

Capitalism would allow the bad banks to fail and the good banks to take market share and prosper while socialism would try to protect the vulnerable in society and spread wealth around.

Instead what we are seeing is incompetent businesses being propped up by the state and an ever increasing concentration of wealth at the top of a pyramid-like economic structure. The vulnerable and the productive aspects of society are being milked dry by the banking system / speculators and tax payers are being bounced into bailing out speculators.

So, quite honestly I cannot tell you anything about how capitalism is doing as what we are experiencing right now is absolutely not capitalism, it's something very different.

Good loser

Capitalism is almost a natural law concommitant of human nature in society.

It takes people natures as it finds them.

The market is one gigantic voting machine with money as a currency.

Every time a money exchange is made a vote is cast for or against something.

The bigger the sum the more significant the vote.

The State's function is to intervene where necessary to ameliorate

excesses and to distribute surpluses where they can be garnered.

Better that people understood market operations ( instinctive to most

people e.g. odds in a betting shop) and worked in harmony with them than

try and theorise them out of existence.

jackbetal

Did we ever really have capitalism? As long as there is lobbying, bribing, blackmailing, threatening, favours, cronyism, nepotism, etc. etc. then capitalism does not really exist and never will. Of course us being human there will always be smidgins of the above but the degree we have it at the moment is incredulous. It is tolerated and is even given respectable names. That is not capitalism. That is corruption in a capitalism costume.

nesf

johnnyskeleton wrote: »

It is as foolish to think that capitalism is doomed because we are in the middle of a depression as it is to think that capitalism is a miracle when we are at the height of a boom.

These are necessary parts of capitalism. Since 1945 economies have tried to stave off the worst of each of these by saving during a boom and spending during a recession, but in the 90s several countries thought it might be fun to to do the opposite and spend in an already overheated economy. Well we are learning the lesson from that, and capitalism will take this experience and learn from it. As it always does.

The problem is Governments have short memories.

wobbles-grogan

nesf wrote:

The problem is Governments have short memories.

Nah, voters have short memories.

nesf

wobbles-grogan wrote: »

Nah, voters have short memories.

True.

wobbles-grogan

nesf wrote: »

True.

Kind of an anti climactic 20,000th post wasnt it? :-)

Anyway, i dont think capitilsm is doomed. It goes through hills and troughs. Always has, always will.

Its particuarly bad this time because of excessive debt and stupid governance!

nesf

wobbles-grogan wrote: »

Kind of an anti climactic 20,000th post wasnt it? :-)

lol, I didn't even notice that.

wobbles-grogan wrote: »

Anyway, i dont think capitilsm is doomed. It goes through hills and troughs. Always has, always will.

Its particuarly bad this time because of excessive debt and stupid governance!

Yeah, I think the debate is really over what kind of systems can we design for Governments to work within that will minimise the problems coming up on the horizon (either the gross mismatch between taxation and spending a la the US, or the high spending programs combined with an aging populace a la the European/Nordic model of how to do things).

Icepick

People blaming "governments" and "politicians" are blaming themselves.

"People are too fat and happy; people are way too fu cking prosperous for their own good."

Drumpot

RichardAnd wrote: »

Alot of the huge over spends in state budgets across the western world were created by socialist, not capitalist policy.

Ah, the great myth . .

Capitalism is a simple free enterprise system that would be a complete success if left unregulated . . The evil socialist intervention , like bailing out banks etc, has been the biggest problem or threat to capitalism . . Right !!!

Wrong, conformism and lack of individual thinking has convinced a generation that capitalism is just an innocent marketing system that has been skewered by poor government decisions. .

If people thought that propaganda was dead, well they are well wrong . .

Firstly, let me say that I dont actually question whether or not governmemts have overspent but this has less to do with socialism then it has to do with the promises that capitalism suggested! Did socialism drive the property bubble ? Eh, no . . The property bubble and indeed the supposed "celtic tiger" driven by capitalistic principles is exactly why we are completely fked as a nation. Irish spending wasnt too bad until we got caught up in a capitalist bubble that helped massage our own hunger for property . . I firmly believe that had we never had access to cheap cash (certainly not a result of socialism!), we wouldnt have a fraction of the probs we would have today . .

I firmly believe as Irish people we voted for it and we got alot of what we deserved to a degree, but socialism was not what encouraged us to pay off bondholders who had taken gambles on our banks. That had nothing to do with socialistic principles. Yes .. Socialist supporters (like our public service) sold their soles to get more, but this was all based on the promise that capitalist progression promised . . I dont excuse the demands that were made, but make no mistake, for anybody to suggest that socialism caused this problem is to completely ignore (or just not understand) how we have gotten to the state we are in.

I have had this argument to death with a close friend who works in a bank. If the truth be known, its no differant to the fact that most of us are conformed to hearing terrible stories. . Capitalism is passed off just like government scandals, politicians dodgy dealings or indeed our top regulators letting our banks away with pretty much whatever they want . . But hey, letting the markets sort themselves out and letting capitalist principles run wild will guarantee that it all works out for the best .

FFS . . People are simply not intelligent or trustworthy enough to run worldwide systems , unregulated (ie - without democratic regulation), without the wrong people getting to the top. What never ceases to amaze me is how stupid and ignorant the human race really is . .

I dont promote socialism, I just think we can do better then capitalism and its only peoples ignorance that prevents progression. Oh, but sure we are told there is nothing better so it must be true . .

Capitalism as a marketing system makes sense, but like most things the problem is the fact that people cannot be trusted to run a system without trying to corrupt or take advantage of it. With that in mind, if I have a choice I would choose at least a socialist system that would satisfy the majority at the expense of the few instead of capitalism that supports the minority at the expense of the majority. One of the probs in Ireland at the moment is that so many people within the public service or benefitting from pensions are benefitting from our countries capitalist strategies that they dont really understand or care about how their salaries are being funded.

RichardAnd

Drumpot wrote: »

Ah, the great myth . .

Capitalism is a simple free enterprise system that would be a complete success if left unregulated . . The evil socialist intervention , like bailing out banks etc, has been the biggest problem or threat to capitalism . . Right !!!

Wrong, conformism and lack of individual thinking has convinced a generation that capitalism is just an innocent marketing system that has been skewered by poor government decisions. .

If people thought that propaganda was dead, well they are well wrong . .

Firstly, let me say that I dont actually question whether or not governmemts have overspent but this has less to do with socialism then it has to do with the promises that capitalism suggested! Did socialism drive the property bubble ? Eh, no . . The property bubble and indeed the supposed "celtic tiger" driven by capitalistic principles is exactly why we are completely fked as a nation. Irish spending wasnt too bad until we got caught up in a capitalist bubble that helped massage our own hunger for property . . I firmly believe that had we never had access to cheap cash (certainly not a result of socialism!), we wouldnt have a fraction of the probs we would have today . .

I firmly believe as Irish people we voted for it and we got alot of what we deserved to a degree, but socialism was not what encouraged us to pay off bondholders who had taken gambles on our banks. That had nothing to do with socialistic principles. Yes .. Socialist supporters (like our public service) sold their soles to get more, but this was all based on the promise that capitalist progression promised . . I dont excuse the demands that were made, but make no mistake, for anybody to suggest that socialism caused this problem is to completely ignore (or just not understand) how we have gotten to the state we are in.

I have had this argument to death with a close friend who works in a bank. If the truth be known, its no differant to the fact that most of us are conformed to hearing terrible stories. . Capitalism is passed off just like government scandals, politicians dodgy dealings or indeed our top regulators letting our banks away with pretty much whatever they want . . But hey, letting the markets sort themselves out and letting capitalist principles run wild will guarantee that it all works out for the best .

FFS . . People are simply not intelligent or trustworthy enough to run worldwide systems , unregulated (ie - without democratic regulation), without the wrong people getting to the top. What never ceases to amaze me is how stupid and ignorant the human race really is . .

I dont promote socialism, I just think we can do better then capitalism and its only peoples ignorance that prevents progression. Oh, but sure we are told there is nothing better so it must be true . .

Capitalism as a marketing system makes sense, but like most things the problem is the fact that people cannot be trusted to run a system without trying to corrupt or take advantage of it. With that in mind, if I have a choice I would choose at least a socialist system that would satisfy the majority at the expense of the few instead of capitalism that supports the minority at the expense of the majority. One of the probs in Ireland at the moment is that so many people within the public service or benefitting from pensions are benefitting from our countries capitalist strategies that they dont really understand or care about how their salaries are being funded.

I've stated more than once that I'm neither a capitalist nor a socialist, I'm a realist. Either of the two schools will fail if taken to extremes thus, the trick is to find the middle way.

That being said, I do believe firmly that the massive over spend was caused by what I would describe as the incompetent application of populist socialism. A country trying to look after its own citizens is a great thing and it's one of socialism's plus points but what we saw here was an extreme which turned out to be a bad move.

Now, the banks being bailed out. Well that's a pickle really because bailing out a failed buisness certainly isn't what capitalism would be associated with and I don't think it could really be considered socialism so what was it? In my opinion it was neither, it was simply the act of politicians and civil servants who had absolutley no idea what they were doing.

The point I'm making is that socialism and capitalism are just words and it may be possible that they don't really exist in a pure form in reality.

Permabear

This post has been deleted.

Suryavarman

Drumpot wrote: »

Ah, the great myth . .

Capitalism is a simple free enterprise system that would be a complete success if left unregulated . . The evil socialist intervention , like bailing out banks etc, has been the biggest problem or threat to capitalism . . Right !!!

It is impossible to have unregulated capitalism because when Governments don't do it the markets will and do a much better job at it.

Bailing out banks and other failed businesses is one of the biggest threats to Capitalism. Capitalism is a profit and loss system, if you bail out the losers wheres the incentive to avoid high risk decisions?

Wrong, conformism and lack of individual thinking has convinced a generation that capitalism is just an innocent marketing system that has been skewered by poor government decisions. .

If people thought that propaganda was dead, well they are well wrong . .

If anything it's the opposite. The vast majority of people speak with disdain when they talk about Capitalism. They also have been brainwashed into thinking that we'd all die in the gutter at 40 if it wasn't for the wonderful Government to step in and save the day.

Firstly, let me say that I dont actually question whether or not governmemts have overspent but this has less to do with socialism then it has to do with the promises that capitalism suggested! Did socialism drive the property bubble ? Eh, no . . The property bubble and indeed the supposed "celtic tiger" driven by capitalistic principles is exactly why we are completely fked as a nation. Irish spending wasnt too bad until we got caught up in a capitalist bubble that helped massage our own hunger for property . . I firmly believe that had we never had access to cheap cash (certainly not a result of socialism!), we wouldnt have a fraction of the probs we would have today . .

More to do with Capitalism than Socialism? Central banking, tax incentives to buy houses, Governments relying on Stamp Duty receipts to fund day to day expenditures and banks knowing they'd get bailed out if they did wrong. None of those things sound like Capitalism to me.

As for your belief that cheap cash has nothing to do with socialism. The cheap credit was created by easy interest rates from Central Banks. To quote an aim from the Communist Manifesto:

"Centralisation of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly"

While that is not what we had during the boom, a Central Bank is a lot closer to Socialism than Capitalism.

I firmly believe as Irish people we voted for it and we got alot of what we deserved to a degree, but socialism was not what encouraged us to pay off bondholders who had taken gambles on our banks. That had nothing to do with socialistic principles. Yes .. Socialist supporters (like our public service) sold their soles to get more, but this was all based on the promise that capitalist progression promised . . I dont excuse the demands that were made, but make no mistake, for anybody to suggest that socialism caused this problem is to completely ignore (or just not understand) how we have gotten to the state we are in.

You are correct in pointing out that it wasn't Socialism that bailed out the bondholders but it most definitely wasn't Capitalism. It was Socialism that Guaranteed deposits held at those banks, which takes away any incentive for the banks to be careful in their activities.

I have had this argument to death with a close friend who works in a bank. If the truth be known, its no differant to the fact that most of us are conformed to hearing terrible stories. . Capitalism is passed off just like government scandals, politicians dodgy dealings or indeed our top regulators letting our banks away with pretty much whatever they want . . But hey, letting the markets sort themselves out and letting capitalist principles run wild will guarantee that it all works out for the best .

Well considering Central banks allowed banks access to credit that wouldn't be available in a free market wasn't leaving the markets work. Then when the laws of economics were obeyed and the markets attempted to liquidate bad investments, Governments around the world then swooped in to save bad banks. It would be short sighted to think that Capitalism can work when Governments constantly attempt to avoid the laws of economics. It's somewhat comparable to the Wright brothers ignoring gravity whilst attempting to build their plane.

FFS . . People are simply not intelligent or trustworthy enough to run worldwide systems , unregulated (ie - without democratic regulation), without the wrong people getting to the top. What never ceases to amaze me is how stupid and ignorant the human race really is . .

Throughout your post you have attacked Governments not regulating markets, then you claim people aren't intelligent enough to regulate markets before saying that markets should be regulated by voters. Would you like to clarify whether you think people should run markets or whether markets can run themselves?

I dont promote socialism, I just think we can do better then capitalism and its only peoples ignorance that prevents progression. Oh, but sure we are told there is nothing better so it must be true . .

Indeed peoples ignorance will prevent progress. The Dark Ages are a perfect example of that. Luckily enough we have intelligent on this planet and in many countries the economy is Capitalist enough to allow those people turn their ideas into something that makes the world a better place for everyone.

Capitalism as a marketing system makes sense, but like most things the problem is the fact that people cannot be trusted to run a system without trying to corrupt or take advantage of it. With that in mind, if I have a choice I would choose at least a socialist system that would satisfy the majority at the expense of the few instead of capitalism that supports the minority at the expense of the majority. One of the probs in Ireland at the moment is that so many people within the public service or benefitting from pensions are benefitting from our countries capitalist strategies that they dont really understand or care about how their salaries are being funded.

In your first sentence are you admitting that people can't be trusted to regulate markets?

As for socialism satisfying the majority, tell that to the people who lived in the Soviet Union. A place where basic consumer wants could not be satisfied, no ladies tights, no washing machines or other basic appliances. People on average spent an hour queuing everyday to get into shops with empty shelves. It would be foolish to claim that Capitalism doesn't satisfy the majority and Socialism does. In Socialism the vast majority might be equal but in Capitalism the vast majority are prosperous.

A Capitalist strategy to wages would be to pay people according to their abilities and productivity. The system we currently have in the public sector is people are paid according to how long they are working and if they're bad at their job nobody can sack them. It doesn't sound like there is much of a Capitalist strategy in the public sector.

Drumpot

Permabear wrote: »

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Wo wo wo . . Go back there a bit . . I will tell you what is populist, presuming that if we had unregulated capitalism that everything would be fine!

I am not blaming capitalism for everything. The problem with any system isnt always the system itself but the people running it.

To simplify exactly my point. I think humans using a capitalist system to run their economys is like encouraging an alcohalic to run a pub. Its destined to fail. Humans, by their very instinctive nature are greedy, capitalism only serves to enhance the desire for more sh*t that people do not need.

You see, you cant simply ignore the fact that governments will continue with the kind of measures that they have been doing. They will not let banks or certain institutions fail, which means that capitalism is a failure simply by virtue of the fact that governments will not be able to adhere to one of its most basic fundamentals (that a company lives or dies by its own success).

The problem with those who defend capitalism is that they are incapable of actually seeing that its already failed. People/companies cannot be trusted when they are unregulated and to presume that pure unregulated markets would make for a perfect world is completely stupid. As far as I see it, larger corporations already run puppet governments in most countries, allowing them to get bigger only means they can contribute more to political parties coffers when elections are coming up.

Its funny how people think that the only thing that is important is wealth and market growth and they fail to consider the potential ramifications to the likes of little things like democracy.

I understand the concept of Capitalism , which makes sense, I just think as Humans we are better with a system like socialism that, unlike capitalism, is less about greed.