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.

mikeman

3,017

September 22, 2016 09:06 PM

So in your ideal government the power (money) belongs fully to the state. But then when a corrupt leader gets into power, he shapes it like North Korea.

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.

Greed (A base emotion) in socialism/communism can cause the entire thing to collapse.

So, you're saying that the 2008 crisis(and I'm just mentioning the last one), which was caused by greed, was "good".

I don't see how it's any different when you put a corrupt and greedy elite in charge of capitalism, than when you put a corrupt and greedy elite in charge of a socialist state.

For the record, I'm in favour of socialism where decision and policy-making is taken as democratically as possible, so we indeed don't rely on the benevolence of a leader or a small caste. This is why I don't have particular sympathies for the USSR - they did what they could to build socialism under the circumstances and constant aggression/encirclement by capitalism, but didn't really work, and I don't really see it as a model that should be imitated by future socialists.

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conquestor3

1,592

September 22, 2016 09:10 PM

You're confusing (or tying a direct relationship with) corruption and greed. People who are greedy but not corrupt can succeed well in capitalism. That greed drives effecient markets.

The mis-steps corrupt capitalists have taken have way less dire consequences than corrupt socialists/communists.

mikeman

3,017

September 22, 2016 09:13 PM

You're confusing (or tying a direct relationship with) corruption and greed.

Where exactly do you draw the line? Outsourcing work to sweatshops and child labour in order to increase profits, is that greed or corruption? Legal loopholes to avoid taxes is greed or corruption? Upping the prices of essential medicines, is it greed or corruption? Starting a war in order to protect your country's corporations' interests, is that greed or corruption? Lobbying governments and law-makers in order to not pass laws, say environmental ones, that harm you economically, is that greed or corruption?

And finally, money in capitalism is power, so, even by your definition, how exactly do you keep people from abusing that power("corruption"). I sincerely want an answer to that. You see "corrupt" capitalists as just "bad apples", that pretty much give capitalism a "bad name". I just see them as men with power that wield it as they see fit, with legal or not-so-legal means, with peaceful or not-so-peaceful means, to further their interests. What is exactly the mechanism here to keep an economic elite that is elected by noone, from abusing said power?

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Alpha_ProgDes

6,963

September 22, 2016 09:21 PM

Where exactly do you draw the line? Outsourcing work to sweatshops and child labour in order to increase profits, is that greed or corruption?

Greed.

Legal loopholes to avoid taxes is greed or corruption?

Greed.

Upping the prices of essential medicines, is it greed or corruption?

Greed. Immoral greed, but greed nonetheless.

Starting a war in order to protect your country's corporations' interests, is that greed or corruption?

Corruption.

Lobbying governments and law-makers in order to not pass laws, say environmental ones, that harm you economically, is that greed or corruption?

Corruption.

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mikeman

3,017

September 22, 2016 09:26 PM

And yet all those things happen in capitalism constantly, and none of them are "good greed", in the sense of benefitting most people(especially when it comes to environmental laws!)...well, except for those that do benefit from said greed and corruption. :)

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Alpha_ProgDes

6,963

September 22, 2016 09:27 PM

If we were talking about an economic theory model that would be the case for a fascist government, as companies/anything of value really would go to the government within 80 years.

That might be the first stepping stone, but it's not fascism. Someone believes that everyone should pull themselves by their bootstraps and no welfare should be given to the lazy, deceitful, and/or incompetent, then naturally taking that theory to its full and logical conclusion, that should apply to everyone. Regardless of familial ties. You can benefit from your family's wealth as long as your family member is alive and is willing to share it with you. But once they cease so does their money. Make your own way, son (or daughter).

The thing is, the government is attrocious at spending money well.

True. But just because corporations do it better doesn't necessarily mean they do it well. As far as the public welfare, I'm gonna side the government to do the right thing before a corporation does. Due to expectations and public mission statements and such.

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mikeman

3,017

September 22, 2016 09:32 PM

Lobbying governments and law-makers in order to not pass laws, say environmental ones, that harm you economically, is that greed or corruption?

Corruption.

Hm...now that I would need you to elaborate on. I'm not talking about bribing, per se, though that happens too. Lobbying is legal though, and an accepted though controversial practice. X corporation is spending money for lobbying and studies in order to convince law-makers that "climate change isn't real" for example. This may be catastrophic(in the literal sense) greed, but is it corruption?

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Alpha_ProgDes

6,963

September 22, 2016 09:35 PM

Hm...now that I would need you to elaborate on. I'm not talking about bribing, per se, though that happens too. Lobbying is legal though.

I saw lobbying and immediately insta-translated that to bribing. My bad. However, IMO, it's one thing to take advantage of an already existing law. It's another thing to purposefully and actively influence public policy to go against the public good just for the sake of profit. At that point, again in IMO, that's the corporation corrupting the system (ie. gov't).

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Brain

19,059

September 23, 2016 12:01 AM

There seems to be a very deep resentment of any inheritance here, or are we only hating on inheritance when it's a lot of money?

How many poeple in this thread have children?

In all honesty I own very little and am not rich or anywhere near. When I do die I want to pass on what little I have to my children. Most of that won't be money, it will be keepsakes, photos, maybe computer data (videos and photos of their birth etc), and things that remind them of me.

All these have value. If inheritance is evil would you deny children this?

...or is it one rule for the rich and one rule for everyone else? Do we draw the line at money and housing and land, or deny all?

Lots to consider and I'd do everything I could to avoid having what little I'd saved for over my life being taken away from my kids...

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warhound

2,315

September 23, 2016 12:10 AM

mikeman, no offense, but you really are starting to sound as if you have something against people treating themselves to stuff if they have the money for it. You and only you claim that it's somehow wrong because there are other people suffering. I agree with conquestor3, it sounds like you want to ban entertainment altogether.

Ugh, this is so what I'm not saying. "Ban entertainment"? Seriously? I'm a videogame developer! I'm simply arguing from the perspective of a socialist, that's all. This is a thread called "the problem with capitalism", right? :P

I mean, I pointed out a minor example of excessive decadence of rich kids partying(don't tell me spraying champagne is not such an example and it's just "fun"; the "guns" are not for drinking it; its only purpose is to show how much money you've got to waste; you might as well take out 100-dollar bills and burn them and call it "fun") just to drive my point home, and you guys got "you want to ban enternainment" from that? Geez! Did I phrase it *that* wrong? I don't think so!

But again, we come to the same point of "people treating themselves to stuff if they have the money for it". Depends on what "stuff". Socialists don't believe any one individual shouldn't be able to hold large private property(not personal property, like your house, your car, your HDTV, your XBox, your movie and CD collection). So, yes, of course I'm not for "banning entertainment" if by entertainment we mean books, music, films, theatre, videogames, having fun with friends. What the hell! Now, if the "things they treat themselves with" are huge mansions, private islands and private jets, yes, I'm for banning those; that is, organize society in such a way so nobody is permitted to own such big property, for the sole reason that it can be put to much better use than one(or few) person's indulgences.

So you're against extravagance. How does one ban extravagance or regulate it? I mean how do you determine what's extravagant and what isn't? One can easily argue that an Xbox One is extravagant if you look at it from the right perspective. Extravagance will always exist, it's just a matter of perspective. There's no such thing as universally extravagant. To someone who doesn't have very much, even driving a car may seem extravagant. To other people, they may have the means but feel that a larger car than the one they own is extravagant.

conquestor3's point about greed is something I get, although maybe greed isn't the right term. More simply put, people will always want things. It's a really basic human instinct.

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The Problem With Capitalism

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The Problem With Capitalism

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