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 8 years, 3 months ago

Alpha_ProgDes

6,963

September 23, 2016 04:06 PM

This is not something Socialism does. Globalism + capitalism accomplishes this by making everyone trading partners.

So that can't happen with globalism and socialism? Socialism doesn't allow trading partners?

Beginner in Game Development? Read here. And read here.

Oberon_Command

6,371

September 23, 2016 04:32 PM

So then who runs the TV station/produces the show? The government? That's a recipe for disaster.

Not necessarily. The people who work at the station could own the station collectively. Why jump immediately to "the government owns everything?"

But, I still "live like a poor person" in that I drive a car with 110,000 miles, have a $130,000 house, and spend as frugally as possible.

In my book, driving a car and owning a house is not living like a poor person. Driving a car and owning your own residence at all makes you lower-middle class, at worst.

My views may be somewhat skewed by the fact that I live in Vancouver - a place where the average single-family separated house costs over $1 million (one bedroom apartments can cost upwards of $100,000), rental vacancies are <1%, and the living wage is $20 an hour. For perspective, the minimum wage here is $10.70 an hour. I make a typical junior programmer salary and it will take me years to save up enough for just a down-payment on an apartment, never mind a house, and for now I'm paying ~$1000 a month in rent. That is considered ot be on the cheap end, and the fact that my rent hasn't gone up by at least a hundred a month in the two years I've lived in this place is frankly astounding. I know people years older than me who will never be able to afford a house on their own here. Comedians joke in comedy shows about being perpetual renters, and the response is typically a chorus of agreement. If you got into the housing market less than 20 years ago, and you own a house here, you are NOT living like a poor person no matter how frugally you live.

The usual response we get when we describe this to outsiders is, "why don't you move somewhere else?" To which I answer... where? This is where the jobs are in these parts. And it's only going to get worse, as folks from Alberta flood the place looking for jobs after the oil crash.

You want to see what unrestrained capitalism as applied to property looks like? I just described it. Not pretty, is it?

For the past few months I've been looking into houses to buy and rent out.

I would point out that by owning multiple houses and renting them out, you're taking away somebody else's opportunity to own the extra houses - and purely for your own profit. That doesn't seem fair - you're potentially shutting some people out of the market to milk them for their wealth. That being said, I'm not entirely opposed to this, if the circumstances are right for it - like in places where the rental supply is really low, like where I live. But still - mine is a city that is practically the face of unrestricted real-estate speculation and house flipping to the detriment of people who actually live and work here, so I get kind of grumpy when I see people casually talking about taking advantage of that kind of thing.

BrianRhineheart

202

September 23, 2016 05:10 PM

http://www.gamedev.net/topic/681014-the-problem-with-capitalism/?view=findpost&p=5312076

_{conquestor3, replied:}
Employment supply/demand... As more are out of jobs wages fall fast.

In such an event:

Do company profits fall fast?

Do CEO salary/bonuses fall fast?

No.

Workers owe it to themselves to have contracts that look out for their best interests. How often, though, do people make this a priority or even think about in great detail before joining the workforce? Unfortunately you are right. When unemployment is too high, desperate people will offer to work for less pay, but then have the nerve to complain about being poor (Hah!).

conquestor3

1,592

September 23, 2016 06:44 PM

So that can't happen with globalism and socialism? Socialism doesn't allow trading partners?

Not as easilly. A government has less incentive to get the best deals/trade for niche commidities compared to a free market.

The people who work at the station could own the station collectively

Like a share... They can own a share of it. Like a ... corporation or something? :P

In my book, driving a car and owning a house is not living like a poor person. Driving a car and owning your own residence at all makes you lower-middle class, at worst.

This is a screenshot of my bank account around that time.

http://imgur.com/8IM7IyJ

The rightmost column is my total bank account worth, the column to the left is a transaction ammount.

I ran out of money. Legit. My girlfriend and I weren't able to buy groceries, so I mowed a lawn for $50 to afford dinner, and sold my car (My auto insurance was killing me, that's the $300 transaction).

I said I grew up poor and I meant it, I've lived with $0-$30 in my bank account for the majority of my life, and my parents have spent 30~ years of their life in that condition as well.

I was paying $600 in rent for a 900 square foot apartment shared with 4 people. Seriously, how did my girlfriend (now fiance) love me enough to stick through that crap?

Capitalism saved my quality of life. I was able to show companies my programming skills and some took note, thought I'd add plenty of value, and hired me. My first week working I actually had to work from home because I didn't have any money to renew my bus pass.

I would point out that by owning multiple houses and renting them out, you're taking away somebody else's opportunity to own the extra houses

It adds value in liquidity of living arrangements. People who rent houses may only want to rent for a few months, or may want to be able to leave on a whim. That's why they'll pay above-mortgage prices to rent. It's a fair trade. I provide the house, they provide a premium on the house. I have to pay the mortgage whether or not someone's renting.

Alpha_ProgDes

6,963

September 23, 2016 06:53 PM

Like a share... They can own a share of it. Like a ... corporation or something? :P

Except they have to actually work there :D

Beginner in Game Development? Read here. And read here.

warhound

2,315

September 23, 2016 10:37 PM

Things are the way they are because they are the way they are. It is known, Khaleesi.

Okay. :P

...

I'm just trying to understand what kind of answer you expect when you ask the (hypothetical) socialists "by what right you take my mountain/oil well and use it to feed everybody". You reject answers that it can't possibly belong to you, no matter the amount or importance of labour you exacted in your lifetime, because you didn't give birth to the liquified dinosaurs and didn't shit out the minerals beneath the mountain, because they're "esoteric". Okay, fair enough. You reject more rational-based answers like "this is a better arrangement for most" because you counter with "but we've had the previous arrangement for millennia" and also "why should I care about what is the best arrangement for most?". Well then, what is exactly the argument that will convince you? The barrel of a gun?

And don't try to confuse this with "some people are taller or smarter or prettier or more talented" please; I already made the distinction between private property and personal property(and your home that you need to live is also personal property that socialists don't want to touch), go back and read - and your body, face, and brain are most definitely the most sacred personal property. If you fear that the evil communists will demand to share your beautiful wife with them because it's not fair they don't have as pretty ones and they're jealous, don't worry, ain't gonna happen (and if some morons do understand socialism in such a way, I will fight on your side against them). :D

Can you at least acknowledge that I demonstrated that socialists make a distinction between personal and private property? I know your view is that owning the house you sleep in and owning an oil well and a mountain are basically the same thing, but can you at least acknowledge that socialists do make that distinction, and don't want in any way to touch personal property, only the means of production? Can you at least give me that?

It's about ending(or reducing) exploitation, war and poverty. It has nothing to do with "jealousy". I rather think Picasso, a known communist and member of the Communist Party until his death, would have very little reason to be jealous of you, samoth. Heck, Engels owned a factory. You think socialism and marxism, as theories, came from a petty, jealous and illiterate proletariat? No freaking way. They came from bourgeoisie apostates. Look them up, the major figures of socialism. Almost all of them! How can it be a product of "jealousy" then? What they were jealous of, Engels, a factory owner, Lenin, born in a wealthy family, Guevara, an aristocrat, Kropotkin, born a freaking prince!.

I understand your point and what you are trying to get at. Leaving personal housing aside, let's talk about corporations/oil wells/etc. If they aren't owned and/or controlled by a person, then does nobody own it or does everybody own it? Who makes the big decisions then? Who takes responsibility when something doesn't work or when something does work? What happens to the wealth generated by the corporation?

I'm not trying to be sarcastic or anything, just want to make sure you don't feel like I'm being excessively harsh or something.

No one expects the Spanish Inquisition!

mikeman

3,017

September 23, 2016 11:47 PM

Things are the way they are because they are the way they are. It is known, Khaleesi.

Okay. :P

...

I'm just trying to understand what kind of answer you expect when you ask the (hypothetical) socialists "by what right you take my mountain/oil well and use it to feed everybody". You reject answers that it can't possibly belong to you, no matter the amount or importance of labour you exacted in your lifetime, because you didn't give birth to the liquified dinosaurs and didn't shit out the minerals beneath the mountain, because they're "esoteric". Okay, fair enough. You reject more rational-based answers like "this is a better arrangement for most" because you counter with "but we've had the previous arrangement for millennia" and also "why should I care about what is the best arrangement for most?". Well then, what is exactly the argument that will convince you? The barrel of a gun?

And don't try to confuse this with "some people are taller or smarter or prettier or more talented" please; I already made the distinction between private property and personal property(and your home that you need to live is also personal property that socialists don't want to touch), go back and read - and your body, face, and brain are most definitely the most sacred personal property. If you fear that the evil communists will demand to share your beautiful wife with them because it's not fair they don't have as pretty ones and they're jealous, don't worry, ain't gonna happen (and if some morons do understand socialism in such a way, I will fight on your side against them). :D

Can you at least acknowledge that I demonstrated that socialists make a distinction between personal and private property? I know your view is that owning the house you sleep in and owning an oil well and a mountain are basically the same thing, but can you at least acknowledge that socialists do make that distinction, and don't want in any way to touch personal property, only the means of production? Can you at least give me that?

It's about ending(or reducing) exploitation, war and poverty. It has nothing to do with "jealousy". I rather think Picasso, a known communist and member of the Communist Party until his death, would have very little reason to be jealous of you, samoth. Heck, Engels owned a factory. You think socialism and marxism, as theories, came from a petty, jealous and illiterate proletariat? No freaking way. They came from bourgeoisie apostates. Look them up, the major figures of socialism. Almost all of them! How can it be a product of "jealousy" then? What they were jealous of, Engels, a factory owner, Lenin, born in a wealthy family, Guevara, an aristocrat, Kropotkin, born a freaking prince!.

I understand your point and what you are trying to get at. Leaving personal housing aside, let's talk about corporations/oil wells/etc. If they aren't owned and/or controlled by a person, then does nobody own it or does everybody own it? Who makes the big decisions then? Who takes responsibility when something doesn't work or when something does work? What happens to the wealth generated by the corporation?

I'm not trying to be sarcastic or anything, just want to make sure you don't feel like I'm being excessively harsh or something.

Come on man, do you really think those aren't questions socialists of any stripe haven't toiled with for decades, and even disagreed about the answers with themselves?

There's a wealth of material out there, if you're so interested about what socialism or marxism says you can read it yourself and make up your mind. I'm hardly an expert on the theory myself, just have a rudimentary grasp on it based on things I've read so far, which you can read too if you're so inclined.

Here, I'll get you started:

https://www.marxists.org/

https://www.marxists.org/subject/students/index.htm

https://www.marxists.org/archive/index.htm

It'll be better for you to read them, if those are genuine questions you have, than me just posting some bad rehash of those things. If nothing else, it will be a history/philosophy lesson, whether you agree with marxism/socialism or not, it played a pretty big role in the 20th century.

Hyperdrive - Futuristic Combat Racing

conquestor3

1,592

September 23, 2016 11:57 PM

Figures a marxist website would hotlink an image with no credit

https://www.marxists.org/subject/students/index.htm

http://www.library.northwestern.edu/spec/siege/images/par00819.jpg

Hotlink redirected to http://www.library.northwestern.edu/libraries-collections/index.html

Marxism was an existential threat to society in the 19th century, responsible for most of the century's strife/war.

It's only not a threat now because countries that followed Marxist principles imploded.

mikeman

3,017

September 24, 2016 12:02 AM

Hey, he asked a question(about what socialists think), I directed him where the answers are. If you don't care, don't read it :)

I can also accuse capitalism of being responsible for the trans-Atlantic Slave Trade(but "greed is good", right?), 2 World Wars and a hundred smaller ones, environmental destruction that is *still* not addressed as it should because corporations' interests always get in the way(but "greed is good", right?), and hundreds of million of children not even having clean water and million others toiling away in sweatshops to make our nice clothes and gadgets. But okay, since it personally "saved your life" and gave you the chance to buy a second house, all is forgiven and there's no reason for us to even question it or try to imagine a successor system.

Hyperdrive - Futuristic Combat Racing

conquestor3

1,592

September 24, 2016 12:10 AM

Hey, he asked a question(about what socialists think), I directed him where the answers are. :)

I can also accuse capitalism of being responsible for 2 World Wars and a hundred smaller ones, environmental destruction that is *still* not addressed as it should because corporations' interests always get in the way(but "greed is good", right?), and hundreds of million of children not even having clean water. But okay, since it personally "saved your life" and gave you the chance to buy a second house, all is forgiven and there's no reason for us to even question it or try to imagine a successor system.

Have Marxist states done better? They've caused more death/environmental damage (China). I guess you don't need to worry about children not having clean water when they're indentured for crimes their parents committed, right?

The Problem With Capitalism

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