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The Problem With Capitalism

Eric Nevala · 2016-11-07T21:48:05

Claim: I honestly believe that a capitalistic economic system is inevitably doomed to fail and that we're already starting to see some of the beginning stages of that inevitable failure. Somehow, we're going to eventually have to gradually move away from capitalism. My untested hypotheses / premises: 1. The world population is growing at an exponential rate. Meanwhile, the ultimate goal of capitalism is to produce goods with as little cost as possible and sell them for as much as possible. The observable trend for capitalistic systems is to use technological advancement to increase the production efficiency of production lines while reducing the costs of production as much as possible. What used to take hundreds of people to produce decades ago may now only take dozens of people today. This trend will reach an asymptote across all industries. The bottom line is that the production of goods requires far fewer people today. 2. As a result of #1, fewer people are required to produce goods. The beneficiaries of these production pipelines are the owners of these businesses. Gradually, the socio-economic classes get stratified to such a point that a handful of people possess a majority of the worlds wealth, the middle class vanishes, and the poor get poorer. Nobody is really to blame for the boon of technological advances, but the capitalistic financial model is going to rapidly become a source of suffering for the majority of people. 3. The world is becoming increasingly globalized, such that multinational corporations can have business operations in multiple countries. Manufacturing is done in parts of the world where it is most economically efficient, where labor is cheap and ecological laws are lax. Sales are conducted online and the transaction takes place in countries with the most generous tax laws. Business interests will try to preserve and push this global advantage in as many countries as possible by spreading "free" trade. Free trade ensures that the benefits of low costs of production are not lost when goods are sold in another part of the world. This forces local workers to compete on a global scale against foreign wages they can't compete against. 4. In the next 50-100 years, most human labor will eventually be replaced with robotic labor. The mass scale production of products will eventually be done by a handful of people. A million cars could be fully produced by a staff of 20 people, from mining raw materials from the ground to the car rolling off the factory floor. The actual production cost per car could be about $5. Imagine that the production of all goods is nearly costless at this point. 5. IF all goods cost nearly nothing to produce and can be sold at the same prices, the markup values will be 50,000x. As the required workforce to produce said items dwindles down to nearly nothing, the potential customer base which can afford to purchase these items at the listed prices drops as well. So, that means we'll have a huge supply in a market which can't afford the existing prices, so the prices will have to drop to meet the price average consumers can afford to pay. What if you can buy a big screen television for $1? 6. The "work" people will do in the future will skew towards work which just isn't economically feasible or possible to replace with robotics or machines. If a coke machine can dispense soda, then a machine could also dispense cheeseburgers. If McDonalds can figure out how to automate hamburger production down to a machine, they would... provided running the machine is cheaper than paying a small staff an hourly wage barely above minimum wage. 95% of what few jobs remain will become service industry jobs (retail will mostly be replaced by online shopping). The remaining jobs will be creative pursuits, such as writing books, creating video games, music, artwork, etc. that a robot can't do. Due to this lack of demand for human labor, unemployment will skyrocket to "absurd" levels (75 percent? Maybe higher?). Basically, you'll be able to login to a computer and order a big screen television to be delivered to your house for $1. ------------- Okay, so normally if we took our existing capitalistic framework / worldview and applied it to this future scenario, it would seem like a dystopia with a lot of doom and gloom. But, the philosopher in me asks, "What's the real objective of life and living? Is it to work or to spend our time with more worthwhile personal pursuits?". When the costs of production have essentially been reduced to zero, why maintain a monetary system at all? What's the point? When the costs to produce something have been reduced to nearly zero, why not just make everything free? What would a society look like where anything anyone could ever want is readily available? The notion of material possessions becomes kind of meaningless. Who cares if your neighbor has a 52 inch television, when you could order one and get it at any time you wish? The concept of measuring worth by material possessions becomes antiquated. When our daily pursuits for mere survival are replaced by pursuits of leisure, I think the natural human tendency is to become creative and to share our creative works with each other (game development being one of those creative pursuits). To take this to a scientific level for a moment, all of what I've said above is testable. We are game developers, and what is a game? Most of the time, it's a real-time simulation, and we can create a simulation of a capitalistic global society and create economic models of the past, current and future economic trends and try to predict the long term economic outcomes. Let's suppose that we can calibrate our real time simulation to accurately predict the future. To test this, we could model the world from the pre-industrial era until the year 2000 and try to predict what the world looks like in 2010 and 2015, and see if the prediction matches reality. Once the model is precisely tuned, we could start making reasonably accurate predictions of what 2050 might look like as well as 2100. Here's where things get interesting though: Since this is a grand simulation, what kinds of tweaks can we make to the simulation to change the predicted outcome? What tweaks would be the best tweaks for promoting global human well being? Would a global minimum wage change things? What about basic income? Tariffs? Or what about the abolishment of currency all together? What if 80% of people go through life having never "worked a job"? In our current worldview and value system, that's kind of hard to comprehend and respect, but that could very well become the norm in the future, and I think, a desirable norm. What if... the only work people did was work that was a passion or hobby for them? Painting... cooking... singing... "work" was just another luxury which people did at their own convenience and will, rather than a mandated repetitious daily sequence of tasks? Whatever happens, one thing is certain: Capitalism is gradually becoming a deprecated economic system because it is a self-defeating system. We're gradually approaching an economic singularity brought on by technological progress, and in the next few decades, we as a human race are going to have to address this. I hope it's in a way which promotes global well being and prosperity rather than finding ways to preserve the increasingly stratified economic system we have currently.

GDNet Lounge Community

Started by slayemin August 03, 2016 11:17 AM

221 comments, last by slayemin 7 years, 10 months ago

Oberon_Command

6,371

September 23, 2016 12:13 AM

I'm not personally opposed to inheritance as a concept. I'm also not actually a "Socialist" (with a capital-S). The real problem in my view is that some people have more opportunities than others through sheer luck of birth. That is a major part of what "class privilege" means, and also "racial privilege" and "gender privilege," and all other forms of privilege for that matter. Ideally, we should all have access to the same opportunities at the start - then our choices would really be the only thing standing in our way.

It's a common right-wing narrative that people become better-off or worse-off through their own choices. But as long as some people are given better access to education, food, and general living standards, one cannot truthfully say that any particular individual's success was due entirely to their own choices. There will always be subtle things working for or against us; an individual's success is less meaningful the higher up on the ladder they begin. A millionaire becoming a billionaire is an accomplishment, but it's not so much an accomplishment as a homeless person becoming a millionaire because of class privilege. The most meaningful successes are those who started the poorest of the poor and ended up the richest of the rich; but I can't think of more than a handful of examples of that.

In my view, we can only have a truly "fair" society - even a capitalist society - if everyone starts off from the same place. As long as there is imbalance of privilege, some of us are more "free" than others.

grumpyOldDude

2,776

September 23, 2016 12:33 AM

we should all have access to the same opportunities at the start - then our choices would really be the only thing standing in our way.

... ...

In my view, we can only have a truly "fair" society - even a capitalist society - if everyone starts off from the same place. As long as there is imbalance of privilege, some of us are more "free" than others.

Then my "Utopia" world model about making essential basics available to all children world over until their 18th birthday, makes sense then!

can't help being grumpy...

Just need to let some steam out, so my head doesn't explode...

conquestor3

1,592

September 23, 2016 01:15 AM

we should all have access to the same opportunities at the start - then our choices would really be the only thing standing in our way.

... ...

In my view, we can only have a truly "fair" society - even a capitalist society - if everyone starts off from the same place. As long as there is imbalance of privilege, some of us are more "free" than others.

Then my "Utopia" world model about making essential basics available to all children world over until their 18th birthday, makes sense then!

What's your solution for the multiple-billions of Indians/Chinese who will request aid?

BrianRhineheart

202

September 23, 2016 01:46 AM

People want different things so each person may define 'success' a little differently.

'Inheritance' IS essential. Land isn't 'created' for every new generation, it is left behind by the great-grand-parents.

If you have two identical islands and on one island parents in the tribe/community make the conscientious decision not to bear more than two children, while on the other island parents of the tribe/community simply don't consider it, after a few generations it may lead to inequality amongst the two islands (even though ironically, equality remains stable on at least one island - you know which one).

Who is responsible and what do you think will happen?

grumpyOldDude

2,776

September 23, 2016 01:57 AM

we should all have access to the same opportunities at the start - then our choices would really be the only thing standing in our way.

... ...

In my view, we can only have a truly "fair" society - even a capitalist society - if everyone starts off from the same place. As long as there is imbalance of privilege, some of us are more "free" than others.

Then my "Utopia" world model about making essential basics available to all children world over until their 18th birthday, makes sense then!

What's your solution for the multiple-billions of Indians/Chinese who will request aid?

Very good point to raise,

but a simple solution to the utopia model is: all member countries contribute to the UN children fund based on certain criteria

- the size of your economy (GDP/PPP)

- the size of your population

It means the biggest contributors would be high GDP, high population

and the lowest contributors would be low GDP, low population

so low population/high GDP and high population/low GDP contributes somewhere in-between

But there were also good questions raised by @mikeman (like how do you separate children and adults in the family when providing basics to children only)

can't help being grumpy...

Just need to let some steam out, so my head doesn't explode...

BrianRhineheart

202

September 23, 2016 02:36 AM

grumpyOldDude, your dream has been coming true since the middle of the 20th Century.

http://www.oecd.org/dataoecd/3/38/1896808.pdf

You might also find these to be an interesting read:

http://www.historyofsocialwork.org/eng/publicaties.php

Hodgman

52,718

September 23, 2016 02:39 AM

The thing about capitalism is that "greed is good". Greed can help promote economic growth, and drive investments. Greed is actually favorable to capitalism. As greed's a somewhat base emotion in many people, this means that greed keeps capitalism running well.

Yeah no. That's something that shitty people tell themselves to feel better about being shitty people.

This is the point in time when the US transitioned from "We all do better when we all do better" to "greed is good":

All it did is make life unfair for workers vs owners.

The entire "Well, my dad worked hard and got us ahead, so you should just work hard and get ahead too" family of arguments are fallacious simply because it ignores the fact that the previous generation did actually live in a world where the power of labor and capital were balanced and everyone benefited from increases in productivity, whereas current generations live in a world where the power of labor is eroded further every day and the majority of people are deprived of a fair share of their own production.

. 22 Racing Series .

BrianRhineheart

202

September 23, 2016 03:18 AM

Chart: "Something happened in mid-70s"

:lol:

Yeah, in 1971 Nixon froze wages for 90 days. I guess the effect lasted longer than 3 months.

Praise only seems to come from either those whose primary source of income did/does not depend on wages or institutionalized economists who were/are oblivious to the fact that banks inflate the money supply (and its associated debt) from virtually nothing.

conquestor3

1,592

September 23, 2016 05:20 AM

This is the point in time when the US transitioned from "We all do better when we all do better" to "greed is good":

No, it's the start of true globalization/outsourcing/automation and improved corporate structures.

Hodgman

52,718

September 23, 2016 05:48 AM

This is the point in time when the US transitioned from "We all do better when we all do better" to "greed is good"...
All it did is make life unfair for workers vs owners.

No, it's the start of true globalization/outsourcing/automation and improved corporate structures.

So... All things that move the balance of power and reward away from workers and redirect it to the owners?

. 22 Racing Series .