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An Argument against Capitalist Economics

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ClassyCommunist
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Post: #1
An Argument against Capitalist Economics

I hope all who read this have read Das Kapital (There's a free PDF on marxists.org)
If labour serves to produce commodities that would have no use value without the labour, why should the use value go to the non-labourer without a fair exchange of value for the labour and commodity i,e, why should the boss who doesn't work get the value of the product?
"A use-value, or useful article, therefore, has value only because human labour in the abstract has
been embodied or materialised in it."

This post was last modified: 09.12.2016 02:36 by ClassyCommunist.

09.12.2016 02:18
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VineFynn
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Post: #2
RE: An Argument against Capitalist Economics

ClassyCommunist Wrote:
I hope all who read this have read Das Kapital (There's a free PDF on marxists.org)
If labour serves to produce commodities that would have no use value without the labour, why should the use value go to the non-labourer without a fair exchange of value for the labour and commodity i,e, why should the boss who doesn't work get the value of the product?
"A use-value, or useful article, therefore, has value only because human labour in the abstract has
been embodied or materialised in it."


This should be moved to politics- arguments about *shoulds* are not economics. But for your sake, I'll explain why upon inspection, economists found 120~ years ago that labour theory of value wasn't realistic.

People don't value stuff because other people have made it. People value stuff because they want it. You could sell dirt to people if they wanted it enough. What do you think real estate is?

Labourers don't have to work for a boss. They work for a boss because he provides capital which makes them more productive, meaning they get higher wages. The boss provides a service to the labourer by making him more productive, and subsequently the labourer is willing to sacrifice a portion of their productivity to the boss in the form of a lower wage than their average productivity. If what you are saying is true, labourers would never work for a boss in a free market.

The boss of course must work to put himself in that position- perhaps he manufactured the capital, or used saved wages from his days as a labourer to buy the capital. It is a skill in of itself to be able to make investments that are useful i.e. improve others' productivity.


I'm leaving and probably never coming back, so thanks for the interesting discussions I guess, dunno why im writing this nobody even irl gives a toss about me anyway

This post was last modified: 09.12.2016 02:41 by VineFynn.

09.12.2016 02:36
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Ajay Alcos
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Post: #3
RE: An Argument against Capitalist Economics

Actually I find that this is is the correct arena for establishing some degree of discussion behind the deficiencies of all economic systems, no matter which part of the spectrum they may hail from. I find that over the past centuries that the rolls and responsibilities of unions have gradually shifted away from their hands and into those of the state. It could be that in our interconnected world that the decline of manufacturing due to technological advancements and the shift of entire workforces into the service sector has dented the degree of power which unions used to have (as the natural protectors of the working-man). That is but one simply scenario.

On the whole however, I find that the developed world is moving quite quickly towards a more post-capitalistic and post-industrial world. Manufacturing as I stated previous has been on a steady decline since the 1950's in much of the Western world whilst at the same time the service sector has taken up the greater share of the work-force. If I maybe permitted to simplify, the last three-to-four centuries has seen a shift of emphasis from agricultural based economies, to manufacturing based economies and currently to more service-sector dominant economies. From a historiographical viewpoint however, all these shifts have seen a degree of conflict regarding the "quid pro quo" acquisition of payment, wages as well as the rights of individuals regardless of their traditional station in society and hence it is only certain that growing inequality in developed nations will (and currently is) leader to further instability and social conflict.

As its has been pointed out be nearly all economists, wage growth in western countries has failed to increase with inflation so whilst productivity has increased exponentially income has remained relatively stagnant. This is of course cannot be sustained as by societies seeking to maintain a greater degree of stability as history dating all the way back to Rome (2nd Punic War) has shown. Hence the effects will overtime be overwhelmingly negative for social-development throughout the world if allowed to continue. It could be that problems are not so much of an economic causality but rather an institutional one, as methods of representation and government have failed to establish the necessary incentives to spread wealth to the less fortunate scions of society.

Naturally closing tax loopholes would be one relatively easy way to stop it one would think, but the extremely interconnect yet still extremely disjointed nature of the worlds financial systems makes this an issue of sovereignty and not just a pure financial matter. And thus the only solution would a huge multinational effort by each and every nation to enforce payment tax acquisition deter evasion; which would not only be a colossal task but an impossible one politically. So without alternate solutions, we are stuck with wealthy individuals or entities simply shifting their capital and assets to greener pastures with the state and societies in general having little in the way of actually deterring them.

And yet, even if somehow governments manage to take in the increased amount of revenue, ensuring that they would actually spend that newly collected revenue to projects that would benefit society as a whole rather than simply use them for purely political interests (pork-barrel, siphoning towards political parties, corporate subsidies). Therefore along with an the almost impossible task of deterring global tax-evasion, you have to deal with another damningly difficult task of increasing governmental transparency and greater democratic input by the population in general regarding decision making (i.e. referendums).

Hence all I can say on the matter is that a correction is scheduled to take place. As to when it will occur, I cannot say.

11.02.2017 11:08
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Helsworth
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Post: #4
RE: An Argument against Capitalist Economics

VineFynn Wrote:
The boss of course must work to put himself in that position- perhaps he manufactured the capital, or used saved wages from his days as a labourer to buy the capital. It is a skill in of itself to be able to make investments that are useful i.e. improve others' productivity.

Or perhaps he simply inherited ownership over natural monopolies, used his influence within society to issue loans & charged interest. Your take on LTV is comical, as is your laborers don't have to work for a boss analysis. Unsurprisingly, you left out bargaining power, one of the core pillars of human civilization.

VineFynn Wrote:
This should be moved to politics- arguments about *shoulds* are not economics. But for your sake, I'll explain why upon inspection, economists found 120~ years ago that labour theory of value wasn't realistic.

Rolf at the bold.

@ClassyCommunist
There are 3 volumes to it, and Marx changed his mind as time went on various things, for instance, he grew out of the gold = money POV. My beef with Labor Theory of Value is the same beef I have with Energy Theory of Value. The issue is not the transformation problem argument, (that's a strawman anyway). What we have to keep in mind about LTV is that it analyses capitalism and capitalist relations. Labor / Energy are but one of many scarce inputs, and the thing about the market price system is that it provides incentives for the combined use of all scarce inputs, not just labor / energy. Marx had to make some assumptions that don’t seem to hold (for instance, the premise that labor is the only source of value). The equilibrium in which the rates of surplus value and profit would be constant turned out to be unstable. His premise contradicted his own distinction between use value and exchange value. I too believe like Keen that Marxism would be stronger without the LTV.

For what it's worth, the marginalist view is this: I exchange my holding of commodity A for your holding of commodity B, because I prefer B to A (i.e. my utility of B is larger than my utility of A); you agree to that exchange because you prefer A to B. In the marginalist view there are levels of utility, though.
If one accepts that point of view, then both sides gain with the trade (which is the criticism marginalists used to make agaisnt the classical theory of value). However, this is not Marx’s view (or that of the neoclassicals). Utility is a subjective construct and classic economists hold the view that science needs to be based on objective phenomena. For Marx, either something is useful or it isn’t: it’s a "binary variable".
So instead of theories of value, I prefer Chartalism. It's descriptive, accurate, in line with history, and completely practical. I also prefer the Post-Keynesian price theory & the institutionalist approach. I also subscribe to the Georgist and Geoist POVs. Private rent extraction is a cancer to the real economy, and it comes in more than one firm. The primary tenet is that natural monopolies (non-man-made things, land, rivers, forests, mountains, minerals, radio waves etc) ought to be used for public purpose. Land is not capital, though, mainstream textbooks say it is. There should be a legal and fiscal distinction between land and capital.
Hudson sums it up in under 4 minutes.
https://www.youtube.com/watch?v=Elg6i3NxvdE
In short, it's all about bargaining power, property rights, and contract laws.


https://www.patreon.com/SerbanVCEnache

This post was last modified: 11.02.2017 13:13 by Helsworth.

11.02.2017 12:15
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yangusbeef
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Post: #5
RE: An Argument against Capitalist Economics

ClassyCommunist Wrote:
I hope all who read this have read Das Kapital (There's a free PDF on marxists.org)
If labour serves to produce commodities that would have no use value without the labour, why should the use value go to the non-labourer without a fair exchange of value for the labour and commodity i,e, why should the boss who doesn't work get the value of the product?
"A use-value, or useful article, therefore, has value only because human labour in the abstract has
been embodied or materialised in it."


Because management contracted them to do so, provided the capital, took on the risk, and made a judgement on market conditions. Effort does not determine the abstract value of the product, supply and demand does (typically, although sometimes prices can determine the abstract value). In other words, the good isn't an embodiment of the laborer; it is an embodiment of the capital and skills of the capitalist. The laborer, in other words, is the middle man between the capitalist and his desired production. On a macro scale, the capitalist and the laborer are the middleman between the banks and investors or other producers and the desired production. Likewise, the ones that are not the middlemen are typically embedded in society; banks like goldman sachs have been around for over a century. But, the middlemen, management and laborers, are quite fluid in large part. These people, of course, make up a majority of the lower, middle, and upper class. (Yes, there are management that are in the lower class. In correlation with contemporary issues, they are often the ones that complain they can't afford health insurance. Forcing them to purchase health insurance, of course, brings ever bigger complaints, as that would force them out of business for their already not-very lucrative business.) Capitalists and laborers have attempted to avoid this natural fluidity by forming corporations or labor unions (Capital naturally centralizes; labor reacts to that centralization). This may or may not be successful. Even with a corporation, a few bad management and the corporation could fall apart, and labor unions have their downsides. Likewise, of course, laborers are typically pro-capitalism, as they directly benefit from the existence of the middlemen management. It is a mostly mutual relationship. The leaches at the top are landed, but their existence is necessary in a Capitalist system. I will also note, however, that there is not better system than the Capitalist system. A simple comparison of results can prove that.


Ajay Alcos Wrote:
Actually I find that this is is the correct arena for establishing some degree of discussion behind the deficiencies of all economic systems, no matter which part of the spectrum they may hail from. I find that over the past centuries that the rolls and responsibilities of unions have gradually shifted away from their hands and into those of the state. It could be that in our interconnected world that the decline of manufacturing due to technological advancements and the shift of entire workforces into the service sector has dented the degree of power which unions used to have (as the natural protectors of the working-man). That is but one simply scenario.

On the whole however, I find that the developed world is moving quite quickly towards a more post-capitalistic and post-industrial world. Manufacturing as I stated previous has been on a steady decline since the 1950's in much of the Western world whilst at the same time the service sector has taken up the greater share of the work-force. If I maybe permitted to simplify, the last three-to-four centuries has seen a shift of emphasis from agricultural based economies, to manufacturing based economies and currently to more service-sector dominant economies. From a historiographical viewpoint however, all these shifts have seen a degree of conflict regarding the "quid pro quo" acquisition of payment, wages as well as the rights of individuals regardless of their traditional station in society and hence it is only certain that growing inequality in developed nations will (and currently is) leader to further instability and social conflict.

As its has been pointed out be nearly all economists, wage growth in western countries has failed to increase with inflation so whilst productivity has increased exponentially income has remained relatively stagnant. This is of course cannot be sustained as by societies seeking to maintain a greater degree of stability as history dating all the way back to Rome (2nd Punic War) has shown. Hence the effects will overtime be overwhelmingly negative for social-development throughout the world if allowed to continue. It could be that problems are not so much of an economic causality but rather an institutional one, as methods of representation and government have failed to establish the necessary incentives to spread wealth to the less fortunate scions of society.

Naturally closing tax loopholes would be one relatively easy way to stop it one would think, but the extremely interconnect yet still extremely disjointed nature of the worlds financial systems makes this an issue of sovereignty and not just a pure financial matter. And thus the only solution would a huge multinational effort by each and every nation to enforce payment tax acquisition deter evasion; which would not only be a colossal task but an impossible one politically. So without alternate solutions, we are stuck with wealthy individuals or entities simply shifting their capital and assets to greener pastures with the state and societies in general having little in the way of actually deterring them.

And yet, even if somehow governments manage to take in the increased amount of revenue, ensuring that they would actually spend that newly collected revenue to projects that would benefit society as a whole rather than simply use them for purely political interests (pork-barrel, siphoning towards political parties, corporate subsidies). Therefore along with an the almost impossible task of deterring global tax-evasion, you have to deal with another damningly difficult task of increasing governmental transparency and greater democratic input by the population in general regarding decision making (i.e. referendums).

Hence all I can say on the matter is that a correction is scheduled to take place. As to when it will occur, I cannot say.



The larger issue is government corruption. Which, I argue, has led to said loopholes or price hikes or lack of wage increases. Patching up the surface problem, tax loopholes, tax havens, etc, is not going to make it disappear. It will only appear later, caused by the aboriginal problem of government corruption. A major slashing of government control and influence over the economy is in order, I my opinion. The original good intended purposes of the original bureaucrats, and it's time to cut out the cancer. At least until we are ruled by angels or robots.

11.02.2017 22:33
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Ajay Alcos
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Post: #6
RE: An Argument against Capitalist Economics

yangusbeef Wrote:
The larger issue is government corruption. Which, I argue, has led to said loopholes or price hikes or lack of wage increases. Patching up the surface problem, tax loopholes, tax havens, etc, is not going to make it disappear. It will only appear later, caused by the aboriginal problem of government corruption. A major slashing of government control and influence over the economy is in order, I my opinion. The original good intended purposes of the original bureaucrats, and it's time to cut out the cancer. At least until we are ruled by angels or robots.


GE = T + D

GE = Maintaining levels of government efficiency with respect to procurement of revenue
T = Transparency
D = Delegation of control/responsibilities

But of course, government control in certain aspects should be diminished drastically but not to the point where the authority of the people in the management of the state is easily counteracted by the interests of external actors (corporations, oligarchs, foreign powers). Therefore I must disagree with some aspects of your argument. Counter-actively diminishing the power of government shouldn't be done arbitrarily on all levels of society as the resultant power-vacuum would simply make it an easier playing field for larger private interests to expand and monopolise on their interests. A sort of "big-fish eat the small fish" scenario. So in essence state, or rather public oversight is vital in ensuring that the various sectors of the economy are made to be dynamic and constant so that new outgrowths of enterprise are not hampered or snuffed out by the whims of major conglomerates. As it has been shown time and time again, the more responsibility that is allocated onto one entity - the more inefficient they become.

Rather I utterly believe that the authority of the state should remain high as long as it remains representative of the democratic desires of the entire electoral population. Rather I take the view that government decision-making should be more decentralised towards localities with the power to veto certain actions that are seen as against the public interest by the power veto via referendum and the like; sort of making them some kind of "third house" regarding legislation. This goes hand in hand with radically increasing transparency in governmental affairs like having the transcripts, documents or recordings of ministerial and bureaucratic decision-making available to the public (lest they are found by an independent judiciary to be in interference with respect to national security) so that they may be scrutinised thoroughly and subject to greater critical analysis (and even amendment by the public).

At the same time certain services provided by the state that have been shown to be better operated by the private sector (the term "better operated" calculated according various factors - mainly cost & efficiency) should be delegated to the private sector (preferably more smaller enterprises) whilst at the same time ensuring that each of the private entities endear themselves to standards set by the public to ensure that things of concern to the populace (safety, hygiene etc.) are followed to the letter. Of course certain services operated by the states (e.g. public transport, postal service) have shown to have been more efficient in the long-term when they were nationalised than when they were privatised as has been witnessed in many countries. Though of course as it is prevalent everywhere we look, the central tenet of economics is scarcity and it is of course common-sense that the government to be wary and thoughtful in regard to allocating public resources that may be better used elsewhere in the economy and society in general.

So to summarise, it is my belief that the authority of the state should remain high but also that more responsibility in the running of the state should be delegated to the people whether by mechanisms such as electronic referendums or to be safe - those old fashioned local assemblies where individuals representing their respective communities voting on matters of national interest (i.e. trade). Therefore the only truly effective way to root out governmental corruption whilst maintaining the overarching presence of the populace in national affairs should be done not by retroactively diminish governmental control (as such an action would likely in turn dwindle the collective bargaining power of the entire electorate) but rather decentralise and hand more control of the government into the hands of the populace to ensure greater public transparency and so that the interests of the state and that of the populace are more in-sync with one another and not so prone to the detachment as has been seen in many developed nations as of late.

Naturally even I myself am sceptical if such actions would ever be implemented in the near or even far future. Even if there is a viable semblance of willpower by just a tiny fraction of the populace to promote or institute for more devolved powers and transparency; actually even attempting to spread the word would take an incredible amount of organisation and collective activism which in turn would likely prove disruptive not only to greater social stability but to the individuals themselves - participant or non-participant. Alas in a certain way, one can view these thoughts simply as a a pipe-dream emanating from the mind of a depressed, chain-smoking alcoholic.

12.02.2017 11:06
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yangusbeef
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Post: #7
RE: An Argument against Capitalist Economics

Ajay Alcos Wrote:

yangusbeef Wrote:
The larger issue is government corruption. Which, I argue, has led to said loopholes or price hikes or lack of wage increases. Patching up the surface problem, tax loopholes, tax havens, etc, is not going to make it disappear. It will only appear later, caused by the aboriginal problem of government corruption. A major slashing of government control and influence over the economy is in order, I my opinion. The original good intended purposes of the original bureaucrats, and it's time to cut out the cancer. At least until we are ruled by angels or robots.


GE = T + D

GE = Maintaining levels of government efficiency with respect to procurement of revenue
T = Transparency
D = Delegation of control/responsibilities

But of course, government control in certain aspects should be diminished drastically but not to the point where the authority of the people in the management of the state is easily counteracted by the interests of external actors (corporations, oligarchs, foreign powers). Therefore I must disagree with some aspects of your argument. Counter-actively diminishing the power of government shouldn't be done arbitrarily on all levels of society as the resultant power-vacuum would simply make it an easier playing field for larger private interests to expand and monopolise on their interests. A sort of "big-fish eat the small fish" scenario. So in essence state, or rather public oversight is vital in ensuring that the various sectors of the economy are made to be dynamic and constant so that new outgrowths of enterprise are not hampered or snuffed out by the whims of major conglomerates. As it has been shown time and time again, the more responsibility that is allocated onto one entity - the more inefficient they become.

Rather I utterly believe that the authority of the state should remain high as long as it remains representative of the democratic desires of the entire electoral population. Rather I take the view that government decision-making should be more decentralised towards localities with the power to veto certain actions that are seen as against the public interest by the power veto via referendum and the like; sort of making them some kind of "third house" regarding legislation. This goes hand in hand with radically increasing transparency in governmental affairs like having the transcripts, documents or recordings of ministerial and bureaucratic decision-making available to the public (lest they are found by an independent judiciary to be in interference with respect to national security) so that they may be scrutinised thoroughly and subject to greater critical analysis (and even amendment by the public).

At the same time certain services provided by the state that have been shown to be better operated by the private sector (the term "better operated" calculated according various factors - mainly cost & efficiency) should be delegated to the private sector (preferably more smaller enterprises) whilst at the same time ensuring that each of the private entities endear themselves to standards set by the public to ensure that things of concern to the populace (safety, hygiene etc.) are followed to the letter. Of course certain services operated by the states (e.g. public transport, postal service) have shown to have been more efficient in the long-term when they were nationalised than when they were privatised as has been witnessed in many countries. Though of course as it is prevalent everywhere we look, the central tenet of economics is scarcity and it is of course common-sense that the government to be wary and thoughtful in regard to allocating public resources that may be better used elsewhere in the economy and society in general.

So to summarise, it is my belief that the authority of the state should remain high but also that more responsibility in the running of the state should be delegated to the people whether by mechanisms such as electronic referendums or to be safe - those old fashioned local assemblies where individuals representing their respective communities voting on matters of national interest (i.e. trade). Therefore the only truly effective way to root out governmental corruption whilst maintaining the overarching presence of the populace in national affairs should be done not by retroactively diminish governmental control (as such an action would likely in turn dwindle the collective bargaining power of the entire electorate) but rather decentralise and hand more control of the government into the hands of the populace to ensure greater public transparency and so that the interests of the state and that of the populace are more in-sync with one another and not so prone to the detachment as has been seen in many developed nations as of late.

Naturally even I myself am sceptical if such actions would ever be implemented in the near or even far future. Even if there is a viable semblance of willpower by just a tiny fraction of the populace to promote or institute for more devolved powers and transparency; actually even attempting to spread the word would take an incredible amount of organisation and collective activism which in turn would likely prove disruptive not only to greater social stability but to the individuals themselves - participant or non-participant. Alas in a certain way, one can view these thoughts simply as a a pipe-dream emanating from the mind of a depressed, chain-smoking alcoholic.


There are several disagreeable parts with your answer. "So in essence state, or rather public oversight is vital in ensuring that the various sectors of the economy are made to be dynamic and constant so that new outgrowths of enterprise are not hampered or snuffed out by the whims of major conglomerates." To the contrary, new "outgrowths" are being snuffed out by the state, via revolving door politics. The bureaucracy then, essentially, charters domestic monopolies to private businesses, corporations, and conglomerates; this is the corruption I am referring to. The only answer to said corruption, I think, is to slash the bureaucracy completely. The bureaucracy then does more harm than it could ever do good. In fact, it has been estimated that regulation in the United States has caused hundreds of billions in losses for rGDP growth. Is that truly "insuring outgrowths"? No, quite the opposite. Historically, when companies have prevented an outgrowth, it has more often than not been with coordination with the government, be it the court system or a bureaucracy with legislated powers. "Rather I utterly believe that the authority of the state should remain high as long as it remains representative of the democratic desires of the entire electoral population. Rather I take the view that government decision-making should be more decentralised towards localities with the power to veto certain actions."I believe such generalities in regards to the responsibility of government are dangerous. It should be looked at a bureaucracy by bureaucracy basis - not a general rule of what the government should have its hand in. This essential rule says that every bureaucracy should be looked at and analyzed. Every possible negative coming from a corrupted bureaucracy should be weighed against the possible good. Whichever value appears to be greater - more harm than good or vice versa - then the bureaucracy should either be slashed or maintained. Making the local governments have the reins would change nothing. Corruption would still exist. Transparency is obviously not enough; the United States has amount of transparency and frankly nobody cares. Regardless, I have heard stories of politicians and bureaucrats doing aforementioned business in "secret" only to be later discovered by chance. Point being, your resolution won't be effective. " the same time certain services provided by the state that have been shown to be better operated by the private sector (the term "better operated" calculated according various factors - mainly cost & efficiency) should be delegated to the private sector (preferably more smaller enterprises) whilst at the same time ensuring that each of the private entities endear themselves to standards set by the public to ensure that things of concern to the populace (safety, hygiene etc.)" This goes back to that rule I discussed earlier. Indeed, some works are better in public hands, such as schools, infrastructure, libraries, fire departments, police, etcetera. This is discussed in The Wealth of Nations (The de facto bible of modern capitalism). The real question is, how far should these public works go? Adam argued it should be as limited as possible - and I agree with him, even in the postmodern world. And finally, I will reiterate, disrupting current corruption is not enough, as it will only appear again later on in the same over-powerful bureaucracies.

12.02.2017 18:34
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Ajay Alcos
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Post: #8
RE: An Argument against Capitalist Economics

yangusbeef Wrote:
To the contrary, new "outgrowths" are being snuffed out by the state, via revolving door politics. The bureaucracy then, essentially, charters domestic monopolies to private businesses, corporations, and conglomerates; this is the corruption I am referring to.


On the dichotomy which you've stated regarding the relationship between the private and public sector. I have personally acquainted myself with quite a few individuals who have accrued a significant amount experience working as public servants and as private consultants; and more frequently with certain uni student acquaintances who've detailed and catalogued the certain ins-and-outs of privileges and the monetisation of information between the public and private sector. I might be going on a tangent here but I can't help myself hence forgive me for the following cacophony of ensuant irrelevance.

Obviously private sector figures enjoy more direct access to bureaucrats and government officials as in this day and age governments in the developed world a loathe to engage public activities, whether that may concern the construction of new transport infrastructure, newer tech updates for state institutions or even menial details such as the installation of brand-new coffee machines. The reasons for such interactive engagement is clear to anyone as, if one were to look from the perspective of the private sector, the best and most reliable (in developed countries at least) consumer is of course the government. From the other spectrum, ensuring active private engagement with the public sector provides certain benefits.

If I may oversimplify and detail such a benefit in regard to geopolitics, "healthy" private and public sector links are in some form a sort of base guarantee that private enterprises do not use their resources, whether intentionally or unintentionally, to pursue projects that might go against the interests of the state. Naturally governments can simply legislate laws against any probable actions, but at the same time much of government revenue, equipment and expertise is almost entirely procured via the private sector and thus the laws of necessity dictate that both must accommodate each-other naturally.

Now the individuals I've taken insight from in regard to the inner-workings of the "revolving door" have in their own words have described "privvies" (Corporate slang for private-public sector intermediaries a girl I know has taken a fancy to) as quite indispensable to both public institutions and private sector entities as their fore-knowledge and expertise whether they be in regard to law (corporate, securities, labour, environment, land and health etc.), logistics, personal connections and most importantly their intimate knowledge regarding the practicalities of both private and public sector organisation. I could probably go-on so-on so-forth about the countless other "tidbits" of knowledge they know have stored within their quite marvellous skulls but to be abrupt - moving on.

To cut short and simplify (and by simplify I mean disintegrate into base and probably facile terminology), if not for those intermediaries forming a meeting between say for example a corporate representative and a pure white-collar public servant without any communicable input whatsoever from a "privvy" would be akin to taking a monolingual Mongolian shepherd going on a blind-date and having engage in conversation with an equally clueless Icelandic flight attendant. Both wouldn't be able to communicate or understand one-another at all. Probably an exaggerated example for sure and of course it is easy to point out that already (and for a very long time) a significant amount of corporate execs and (for the most part) public servants have worked or have some degree of familiarisation in both sectors. None-the-less both public and private sector organisations constantly cycle individuals from each other so as to naturally keep up-to-date on developments within both streams.

With bureaucracy on the other-hand, the gargantuan intake for administrative and organisational expertise to meet the ever-growing demands of government projects/institutions (wages, payslips, building supplies, technical repair, equipment, documentation, implementation/tweaking or amendment of legislation and Gods know how much more) simply cannot be met without the experience and/or input of those who have the necessary knowledge in any if not even a majority of the relative fields. Doing without such individuals would put implementation of policies or even logistical procurement into melt-down (e.g. these adapters don't fit into these sockets, the software is incompatible with our machines, this order doesn't comply with land articles stated under section... you get the drift).

Of course most institutions and bureaucracies in much of the developed world exercise a great degree of internal oversight to ensure that "privvies" exercise their given responsibilities in accordance with "the rules"; the ones set out by the organisation as well as according to the law. However it is harder to detail the volume or frequency at which certain illicit circumventions are made by said people when procuring, engaging or implementing certain aspects of public interest as levels transparency/access to that information varies quite alot per country. In America's case the way the system in which its bureaucracy (departments and nominally public institutions) are arranged from an organisational perspective is from my viewpoint very bizarre. Though considering the diabolical amount of text I've just drivelled onto my screen, I think it would be best for me to take a break and continue on that point along with your other ones in a later post after I've done some vital chores (bloody hell I've written too much).

12.02.2017 23:01
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Ajay Alcos
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Post: #9
RE: An Argument against Capitalist Economics

yangusbeef Wrote:
...The only answer to said corruption, I think, is to slash the bureaucracy completely. The bureaucracy then does more harm than it could ever do good...

...It should be looked at a bureaucracy by bureaucracy basis - not a general rule of what the government should have its hand in. This essential rule says that every bureaucracy should be looked at and analyzed. Every possible negative coming from a corrupted bureaucracy should be weighed against the possible good. Whichever value appears to be greater - more harm than good or vice versa - then the bureaucracy should either be slashed or maintained...


I'm back. But to answer your 2nd point I believe I should first raise that we should both attempt to avoid giving in to our temptation to generalise; whether they be our personal viewpoints, opinions and most importantly our findings as it seems we've apparently both failed to comprehend and properly explain to one another about our dispositions and points. Onto the main subject. I rather must say that viewing bureaucracy and institutions regardless of whether they are of a public or private nature as a zero-sum game is misleading.

On the contrary, your statement that; "The only answer to said corruption, I think, is to slash the bureaucracy completely", I must say is rather vague. Of course I assume that this itself might just be a generalisation but I nonetheless feel compelled to answer it with equally diligently. First, if you were to "completely slash" a certain public department or institution even if it has been found that its costs outweigh whatever benefits it may provide, one would first have to find a suitable replacement which can provide a similar (if not the same) level of quality and services whilst at a lower overall cost. Simply extirpating an entire bureaucracy will simply leave a temporal void in which the demands of the public simply cannot be serviced.

Naturally you, as well as other people I know, may take the viewpoint that the private-sector would simply vault at the opportunity of taking up a whole new market-base that is up for grabs. I would caution however that this would not guarantee that the services contributed by the private-sector to replace those lost by the axing of the said public institution previously responsible has a distinct possibility of not being able to keep up to the same standards and quality as those previously provided. Enacting privatisation without finding and emulating an example of a private enterprise performing the same task at a equally satisfactory level would take alot of political courage. If private-sector itself fails to provide the similar satisfactory once given by said service when it was in the public sector, their would be a clamour however minor for the authorities to set standards and rules for which the private-sector must adhere to for that particular service, which would in turn further raise evaluatory costs for the responsible companies (maybe even further than when they were publicly-run).

On the contrary, there are various extra methods that should be used to determining the flaws and the benefits in the way a particular institution is being run. It could be that a certain department simply has an overemphasis on a particular area (i.e. allocation) leading to it lacking the resources in catering to an equally vital part (i.e. procurement). A reform-minded commission for example would instead probably recommend that that institution revamp and restructure its administration and resource allocation in such a way to minimise waste and become more efficiently. Alternately they could reallocating surplus funding from other less important departments to that particular institution depending on how vital it is to the running of the state. But to end on a hopefully final note (for this point at least). The void left by any sudden removal of a public institution takes time to be filled. And as one of my most favourite Americans has so fondly been attributed to have said: “Remember that time is money”.

yangusbeef Wrote:
...Is that truly "insuring outgrowths"? No, quite the opposite. Historically, when companies have prevented an outgrowth, it has more often than not been with coordination with the government, be it the court system or a bureaucracy with legislated powers...


Which I stated in the previous post can be attributed to the far more direct access which the private-sector has had from the very onset of trade to the authorities. Overtime back from when human societies started to expand and develop in complexity, those living as free-agents such as traders, merchants and so-on accrued more and more power from the traditional stratas of society (landholding aristocracy). Since industrialisation however, this development has grown and spread in such a way that developed societies simply cannot do without the succinct and elaborate interdependence between the specialisation of the private-sector and the services provided by the public-sector (lest they prefer to end up like some nightmarish 1984 dystopia à la North Korea).

A Ministry of Health for example would be responsible for providing the the necessary expertise, supplies and infrastructure needed to provide and maintain an acceptable level of healthcare for the general populace (their "prime consumers") and yet procuring such items as we can both agree on is mostly done through the private-sector, with each enterprise specialising their expertise into producing or providing a service that is vital to the running of a healthcare facility. Hence though a hospital's best clients maybe its patients, the private-sector is what for the most part gives it the means to do so - as well as funding from the government to acquire such means. This therefore is why I believe more powers of oversight should be devolved to the individual rather than to just regulatory bodies or investigative commissions; not just through the use of ombudsmen and professional associations. This would as evidenced in states to some extent such as Scandinavian countries, Benelux nations and Switzerland in reducing institutional corruption by alot whilst also maintaining an efficient bureaucracy and guaranteeing greater say for electorate in the running of the state; in particular nationwide policies (see this article).

yangusbeef Wrote:
..."Rather I utterly believe that the authority of the state should remain high as long as it remains representative of the democratic desires of the entire electoral population. Rather I take the view that government decision-making should be more decentralised towards localities with the power to veto certain actions." I believe such generalities in regards to the responsibility of government are dangerous...



I admit that I completely overgeneralised in regard to that passage hence I can only apologise for not elaborating more clearly and in greater detail (I shall do so now).

yangusbeef Wrote:
...Making the local governments have the reins would change nothing. Corruption would still exist. Transparency is obviously not enough; the United States has amount of transparency and frankly nobody cares. Regardless, I have heard stories of politicians and bureaucrats doing aforementioned business in "secret" only to be later discovered by chance. Point being, your resolution won't be effective...



Now for me to add more meat onto the bones ("yum!"). Transparency no matter how deep and widespread it is is useless if it does not correlate with an increase of power and oversight given to the individual voter. That is where D comes in (as further detailed in the equation I wrote in my previous post). Ensuring efficiency and the actions necessary to enact clean-sweeps or changes of bureaucratic processes as well as eradicating corruption requires greater input, oversight as well as control by the general populace.

This coinciding with greater legal deterrents against any illicit activities by public officials such as graft, bribery and other forms of corruption. Through greater delegation of responsibility to the voters, politicians and public officials can thus be made to be more sensitive to the whims and needs of the population lest they lose office (or worse). Localising power not so much into local governments but rather more-so into the hands of voters is an absolute necessity in not only maintaining greater levels of liberty but also to allow for future room for socio-economic growth.

yangusbeef Wrote:
...In fact, it has been estimated that regulation in the United States has caused hundreds of billions in losses for GDP growth...



Quite frankly it is my opinion that the "hundreds of billions in losses for GDP growth" is in actuality (to my mind at least) a severe understatement. I personally wouldn't be surprised if it is costing the U.S. up to $1 trillion in potential GDP. This may be too short to actually be a viable critique of the system of regulatory policy in the United States, but to be blunt I believe the problem with it is not so much that it is "excessive" in many areas; but that the process in which it is implemented and managed is deficient and inept, thus creating more losses to potential income on top of the excessive amount of differing codes of regulation found in the United States. Dodd-Frank Act should be seen a rushed document in my opinion due to the political urgency at which it was enacted into law at the time. Most articles of that Act even in 2017 haven't even been fully implemented by the responsible regulatory bodies.

Despite that, I feel that it was a sensible and understandable action given the calamity and damage sub-prime lending caused and the ensuant bubble that lead to the GFC. The relaxation prior over regulatory oversight by the government (pointing at George W.) and the resultant desire for U.S. find a viable solution to that issue would have made any extended inaction politically damaging for the entire establishment. Although generally it is not good to have ones decisions driven by the fear, both Congress and the Federal Government are imbued with responsibility of maintaining peace and stability within America; whether social or economic. So naturally not doing something to avoid or at least mitigate a repeat of what lead to the causes made by the private-sector (sub-prime lending) from occurring again would in retrospect be completely irresponsible given their stations.

However from its onset the act was doomed to dragged by its flaws due to the unique way the United States governs its regulatory bodies and because of the setup of its political system in general. Though it was made to be comprehensive for all sectors of the U.S. economy, even this was overambitious given the ability of the individual states to actually thwart or overturn any action needed to make all the state regulatory codes compatible with the rest of the country. Also the way in which regulatory bodies are set up in the United States is quite frankly atrocious from an administrative perspective.

I shall touch on one aspect of American regulation. The way banking regulation is managed and implemented in the U.S. for example is something I have a major beef with. Compared to say the other G20 countries, the sheer way that all of its different regulatory bodies are fragmented and divided into as well as practical lack of regulation over the regulators themselves would make even EU regulators appear saintly in comparison. I can empathise however given the huge amount of leverage Corporate America and Financial sector has within the Wheels of American politics as the fear of a potential "regulatory capture" over a single regulatory body would've made that legislation completely useless. Also the ludicrous difference and degree of regulatory codes in each individual state from the Upper-East Coast down to Florida, across the Mid-West and all along the West Coast is almost comical.

Enterprises looking to say engage in business in all the different states would have to hire legal experts well versed in the differing regulatory codes found within each one just to make sure that their products/services are compliant. Major corporations and big businesses are easily able to afford such help but for small and even medium sized businesses this is completely untenable and destroys any room for growth - and it is these very businesses that are the main driver of any dynamic economy. The habit of lawmakers simply dishing out new legislation without reviewing, ensuring compatibility (with clear standards set on a national level) and compartmentalising them into more simplified articles is something that should be changed.

It would probably take something as shatteringly ambitious as the Napoleonic code to overhaul all the legalities surrounding regulatory codes within the United States, and subsequently convert them into a more palatable and simplified rule book. However if the U.S were able to overhaul and simplify every branch of its regulatory codes, the possibilities for the U.S. to develop socially & economically would open up a vast frontier for economic development. However given the state of U.S politics and the varied disagreements on this issue from people I know (Americans whom I should state throw their support behind either of the major parties); in this it would almost certainly fail. These articles from the Economist for example (Over-regulated America / Remaking American financial regulation) highlight but a glimpse of the stark failures of U.S. regulatory policy.

yangusbeef Wrote:
...This goes back to that rule I discussed earlier. Indeed, some works are better in public hands, such as schools, infrastructure, libraries, fire departments, police, etcetera. This is discussed in The Wealth of Nations (The de facto bible of modern capitalism). The real question is, how far should these public works go? Adam argued it should be as limited as possible - and I agree with him, even in the post-modern world. And finally, I will reiterate, disrupting current corruption is not enough, as it will only appear again later on in the same over-powerful bureaucracies...


I concur with much of what you say. However in regards to "how far should these public works go?": They should to some extent to some extent be limited to a state which provides an adequate degree of coverage that guarantees the basic welfare of the population (namely security, health, ease of movement). This would most likely bog down into the intricacies of managing various interest which politicians and civil servants excel at. Nonetheless I believe any responsibilities taken up by the public sector have to be counterbalanced and checked via the further empowerment, involvement, oversight and control by the ordinary voter. Given the ease of communication centuries of human technological advancement has given us, it is not something I find to be unforeseeable.

Onto OP's main question however, economics is a science and like all scientific fields new knowledge, findings and data constantly change the way we think. "Capitalism" in 100 years from now may be completely unrecognisable to us. As to whether our successors would view their system of resource allocation as capitalism is ultimately for them to decide.

P.S: A thousand heartfelt worries for this word-bomb Sad

13.02.2017 18:02
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yangusbeef
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Post: #10
RE: An Argument against Capitalist Economics

Ajay Alcos Wrote:

yangusbeef Wrote:
To the contrary, new "outgrowths" are being snuffed out by the state, via revolving door politics. The bureaucracy then, essentially, charters domestic monopolies to private businesses, corporations, and conglomerates; this is the corruption I am referring to.


On the dichotomy which you've stated regarding the relationship between the private and public sector. I have personally acquainted myself with quite a few individuals who have accrued a significant amount experience working as public servants and as private consultants; and more frequently with certain uni student acquaintances who've detailed and catalogued the certain ins-and-outs of privileges and the monetisation of information between the public and private sector. I might be going on a tangent here but I can't help myself hence forgive me for the following cacophony of ensuant irrelevance.

Obviously private sector figures enjoy more direct access to bureaucrats and government officials as in this day and age governments in the developed world a loathe to engage public activities, whether that may concern the construction of new transport infrastructure, newer tech updates for state institutions or even menial details such as the installation of brand-new coffee machines. The reasons for such interactive engagement is clear to anyone as, if one were to look from the perspective of the private sector, the best and most reliable (in developed countries at least) consumer is of course the government. From the other spectrum, ensuring active private engagement with the public sector provides certain benefits.

If I may oversimplify and detail such a benefit in regard to geopolitics, "healthy" private and public sector links are in some form a sort of base guarantee that private enterprises do not use their resources, whether intentionally or unintentionally, to pursue projects that might go against the interests of the state. Naturally governments can simply legislate laws against any probable actions, but at the same time much of government revenue, equipment and expertise is almost entirely procured via the private sector and thus the laws of necessity dictate that both must accommodate each-other naturally.

Now the individuals I've taken insight from in regard to the inner-workings of the "revolving door" have in their own words have described "privvies" (Corporate slang for private-public sector intermediaries a girl I know has taken a fancy to) as quite indispensable to both public institutions and private sector entities as their fore-knowledge and expertise whether they be in regard to law (corporate, securities, labour, environment, land and health etc.), logistics, personal connections and most importantly their intimate knowledge regarding the practicalities of both private and public sector organisation. I could probably go-on so-on so-forth about the countless other "tidbits" of knowledge they know have stored within their quite marvellous skulls but to be abrupt - moving on.

To cut short and simplify (and by simplify I mean disintegrate into base and probably facile terminology), if not for those intermediaries forming a meeting between say for example a corporate representative and a pure white-collar public servant without any communicable input whatsoever from a "privvy" would be akin to taking a monolingual Mongolian shepherd going on a blind-date and having engage in conversation with an equally clueless Icelandic flight attendant. Both wouldn't be able to communicate or understand one-another at all. Probably an exaggerated example for sure and of course it is easy to point out that already (and for a very long time) a significant amount of corporate execs and (for the most part) public servants have worked or have some degree of familiarisation in both sectors. None-the-less both public and private sector organisations constantly cycle individuals from each other so as to naturally keep up-to-date on developments within both streams.

With bureaucracy on the other-hand, the gargantuan intake for administrative and organisational expertise to meet the ever-growing demands of government projects/institutions (wages, payslips, building supplies, technical repair, equipment, documentation, implementation/tweaking or amendment of legislation and Gods know how much more) simply cannot be met without the experience and/or input of those who have the necessary knowledge in any if not even a majority of the relative fields. Doing without such individuals would put implementation of policies or even logistical procurement into melt-down (e.g. these adapters don't fit into these sockets, the software is incompatible with our machines, this order doesn't comply with land articles stated under section... you get the drift).

Of course most institutions and bureaucracies in much of the developed world exercise a great degree of internal oversight to ensure that "privvies" exercise their given responsibilities in accordance with "the rules"; the ones set out by the organisation as well as according to the law. However it is harder to detail the volume or frequency at which certain illicit circumventions are made by said people when procuring, engaging or implementing certain aspects of public interest as levels transparency/access to that information varies quite alot per country. In America's case the way the system in which its bureaucracy (departments and nominally public institutions) are arranged from an organisational perspective is from my viewpoint very bizarre. Though considering the diabolical amount of text I've just drivelled onto my screen, I think it would be best for me to take a break and continue on that point along with your other ones in a later post after I've done some vital chores (bloody hell I've written too much).


A fair point, revolving door politics can't be avoided. But then one must wonder why even have the politics at all, if it is a "ticking-time-bomb". I will note that some bureaucracies are completely independent of direct congressional appointments, so keeping Congress in check is a different story. It revolves around the president, but as I have hopefully aforementioned there is no such thing as direct control. Remember these are individuals, not collectives, and they will seek their own self-interest, even with their own self espoused "virtuous" values. I still stand by my point; your last resort rhetoric is ineffective. The bureaucracies, at least the ones that are painfully harmful or could be harmful, need to be cut. The people in those bureaucracies will have to bite the bullet of course, but as is the bitterness of life.

14.02.2017 02:23
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