The Mystery of Capital

Reader Mike N. contributed this review of The Mystery Of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. Hernando de Soto, for those unfamiliar, is an interesting character in his own right.

The Mystery of Capital author Hernado de Soto pages 276 publisher Basic Books rating 8.5 reviewer Mike N ISBN 0465016146 summary A take on the abstraction of 'Capital' We read about the new economy, cyber-squatting, e-cash, intellectual property, and the Wild West on the internet. How can we intelligently consider these concepts if we are unclear about what the old economy, or cash, or physical property (let alone the real Wild West) is?

Hernado de Soto addresses the latter questions while making the case for his central thesis: that Western property law and administrative infrastructure is the reason for the ascendency of the Western economy.

The book is framed as an investigation of the 'Five Mysteries of Capital' during which the author enthusiastically demonstrates the shortcomings of common knowledge on the subjects of poverty, money, law, and history.

De Soto's mysteries are, in short:

1. The Mystery of Missing Information. How much poverty, and conversely, how much property is there in poor countries, and how do we measure it? Huge numbers of people live and work off the books: they have no clear title to their land and possessions, they pay no taxes, they have no credit. We're not talking about subsistence farming here, but about buses and taxis, repair shops, and light industry. This 'Shadow Economy' is explored, and the 'Dark Capital' bound to undocumented resources is examined.

2. The Mystery of Capital. What is Capital, where does it come from? De Soto views capital as not just a proxy for physical assets, but as a side effect of of property laws and infrastructure. His explanation of capital amplification derived from the standardization, globality, and liquidity that is given to property by standard protocols and infrastructure echoes common reflections on the internet phenomenon.

3. The Mystery of Political Awareness. Why have so many governments failed so badly at economic reform? Simply because they do not realize they are in the midst of their own Industrial Revolution, 200 years late. De Soto argues that the true extent of the shadow economy was unknown until recently, and methods of dealing with it are in process. It is refreshing to read something on this subject that acknowledges the hard work and sincerity of many of these governments, rather than rehashing accusations of incompetence and corruption.

   4. The Missing Lessons of U.S. History. How did the U.S develop an infrastructure that nurtures successful Capitalism? This section is an entertaining overview of the evolution of U.S. property law (believe it or not). What I found interesting was the way that 'law' would spontaneously arise in circumstances where the existing system was inadequate or non-existent. Also of interest were the examples of legislation chasing and converging (roughly) with reality over a century long period.

   5. The Mystery of Legal Failure. What legislation is required to = enfranchise the people of the Third World? Again, the author makes an argument for law tracking reality. In the Roman legal tradition, laws are not created, they are 'discovered'; the best laws are those that fit existing practice. Well intentioned land reform measures fail because they do not reflect the actual situation. People do not want to be uprooted, they want title to what they believe is theirs.

If anyone believes the answer to any these questions is either simple or boring, they are mistaken. De Soto addresses topics such as the nature of cash, the importance of responsibility, and the impregnability of badly designed bureaucracies in the course of his arguments. An especially harrowing read is his description of research detailing the steps required to get title to property in Haiti, the Philippines, and several other countries. Ith can take decades (decades!) and hundreds of transactions with dozens of bureaucracies to get clear title to land that a family may have lived on for generations.

De Soto tells a story about walking through rice paddies in Indonesia - = there were no survey markers or fences, but he knew whenever he crossed a property line - a different dog barked at him. He tells a group of ministers working on land reform to start at the bottom; listen to the dogs. and work up from there. His message is simple -- discover the law, then write it.

In each of these sections the author firms up his arguments with a = unique perspective based on solid research as much as theory. The final section of the book gives sober and well thought out step-by-step directions to lift people out of poverty and invisibility, again based on experience in field programs, rather than ideology.

This book is infused with a sort of passion that gives the arguments and figures an unexpected fascination. It is neither an anti-globaliztion rail nor a 'greed is good' apologia, but a well thought out investigation into a subject the author cares deeply about. For myself, I care little for economics, but I am familiar with engineering. De Soto approaches his topic like an engineer; he is interested not in promoting a theory, but in solving a problem.

I would recommend this book to two audiences: anyone interested in world poverty or economics, or those interested in the interaction and evolution of laws (ill-informed or not) and the Web. I would also recommend that we start barking.

You may find out more about the author at www.ild.org.pe.

You can purchase The Mystery of Capitalism from bn.com. Slashdot welcomes readers' book reviews. To see your own review here, carefully read the book review guidelines, then visit the submission page.

Comments

Capitalism is necessary, but not sufficient

[YIAAL]

You need a free market, but free doesn't just mean free from governmental control. You need enforceable contracts, tolerably low levels of official corruption, and the right set of (usually unspoken) assumptions about how things work. The West has that; most other areas don't. Unfortunately, cultural changes take a long time.

Re:Capitalism is necessary, but not sufficient

[1010011010]

Absoutely. And part of what the author shows is that, unlike the usual stereotype of anarchy, capitalism needs a strong government to work. It's just that, in a captialist system, the government work for and follows the people, rather than attempting to herd them "for their own good." I.e, capitalism requires a government for, by, and of the people.

- - - - -

Re:Capitalism is necessary, but not sufficient

[Jonathan]

capitalism requires a government for, by, and of the people.

There is a common belief that capitalism and democracy go hand-in-hand, but there is at least one rather obvious exception: Singapore. There's a country that is as capitalistic as possible, with McDonalds and Gap stores on every block, and yet has a rather oppressive government.

Re:Capitalism is necessary, but not sufficient

[buster_dog]

Actually, what you need is liberty. Immigrants from very poor countrys (India, for example) to the US tend to outearn average Americans in their second generation. Opportunity is not cultural. The idea that it is cultural is nonsense. When Hong Kong had economic liberty they prospered.
The US has done well because it has had the most the longest.

survival of the fittest

[peter303]

Capitalism doesn't prosper because is it is the nicest
or most logical system, but the most successfully
expansive. It grows beyond everyhting else.

Hernando De Soto

[jcapell]

Try THIS link.

This is clearly wrong

[Andy Tai]

That capitalism only works in the West is clearly wrong. It works in East Asia, where often democracy is lacking but capitalism succeeds. For example, Japan has been capitalistic since the last 19th century. Big business combines still control much of the power in Japan and South Korea. Taiwan, Republic of China's founding ideology is the Three People's Principle, which is very socialistic, but Taiwan was rated one of the most capitalistic region in the world. Not to mention the mainland region of China, under the rule of the Chinese Communist Party, where the so-called "Socialist Market Economy" is advancing rapidly to turn Chinese mainland into one capitalistic economic powerhouse, after the "Capitalistic Roader" Deng Xio-Ping's reform. ("Capitalistic Roader" was the term used by Deng's left wing opponents during power struggle in the 1970s before Deng's victory to power)

Re:This is clearly wrong

[Delambre]

I don't believe the central thrust of the book is that only countries that are physically located in the Western hemispheres are capable of sustaining workable capitalism. I think the point is more that one needs a Western-style legal system to do so.

I admit that I don't know enough about these Japan and South Korea to speak at length on their economies, but both are well known for "crony capitalism" where connections and political clout are far more important to the success of a business than the quality of its product or efficiency of production. One might argue that the US is quickly moving towards such a state, but that's another issue.

Del

Rather a USA-Centric world view, no ?

[Lord Hugh Toppingham]

I suspect that many Europeans would disagree that capitalism only works in the west. I would go one step further and say that Capitalism does not work in the USA. What you seem to have in the USA these days owes more the the 'Corporate State' of Mussolini's 1930s Italy than to any true notion of a free market.

Lets examine some facts.

1) America has the largest tax receipts of any country in the world. Hardly a Capitalist utopia.

2) America spends more on its miltary than any other country in the world. What exactly does this contribute to free trade ?

3) American corporations are amongst some of the most monopalistic in the world. Is this the free market ?

4) When forced to compete on a level playing field, US corporations fail dismally. E.g. the auto industry. You will not see ANYONE driving an Amercian car in Europe. Like most Amreicans, we would prefer a quality vehicle from BMW, Mercedez-Benz, Volkswagen, Seat, Skoda, Porshe, or even a Japanese made vehichle rather than the American low quality product.

5) Exploitation of resources and inefficiency. America leads the world in the destruction of the natural environment. Like the farme who eats his seed corn, they will surely reap their rewards.

Anyway In conclusion. There is little that the rest of the world can learn from America. Europe rejected Fascism in the 40's, America seems hell-bent on re-learning the same lesson Europe learned so long ago. It pains me to see it as I feel a moral reponsibility (since around 70% of Amercians come from my homeland).

Perhaps Americans who reject the direction their society has taken should return to the Motherland England, to like a more socially acceptable lifestyle.

We will put the kettle on for you and make a nice cup of tea :-)

Re:Rather a USA-Centric world view, no ?

[m.o]

So then how do you explain the fact that the US has the highest GDP per capita in the world (well, occasionally surpassed by the United Arab Emirates or Luxembourg for brief periods of time)?

Re:Rather a USA-Centric world view, no ?

[Reality Master 101]

What a steaming, stinking, unsightly pile of inaccurate information.

America has the largest tax receipts of any country in the world.

That receipts are irrelevent. America has only moderate tax rates (although still too high). They're not even close to the highest in the world.

America spends more on its miltary than any other country in the world. What exactly does this contribute to free trade ?

You're joking, right? How about, for one, the free-flow of oil at market prices? Or do you forget that Saddam dude who tried to take over a large majority of the world's oil supply? If the US hadn't stepped up, you would have a king of the "United Kingdom of the Middle East" by now. Stable economies require a stable world. A strong military is critical to stable economies.

When forced to compete on a level playing field, US corporations fail dismally. E.g. the auto industry.

The car companies don't care about exporting their cars. I was reading an article a few years ago about how the American car companies only recently produced a car that could be changed to have the steering wheel on the right side. The problem is that Americans like big cars, and the rest of the world doesn't. So it's not all that profitable for American car companies to produce tiny euroboxes that all have to be exported, since there is no market here.

In any case, I believe the Ford Fiesta (?) is one of the best, if not the best, selling cars in Europe, so they can do it if they care.

But going beyond cars, the US dominates in almost every industry that matters, particularly the leading edge ones like software.

America leads the world in the destruction of the natural environment.

Cite some proof. American is one of the cleanest countries in the world. In fact, I remember a british engineer who I met about 10 year ago who came over for some temporary work. I asked him what struck him the most about the US, and remarked he couldn't believe how clean everything was. Just an anecdote, but telling.

If you want to see pollution, take a look around Europe some time.

--

Re:Rather a USA-Centric world view, no ?

[abelsson]

GDP/capita does not a whole story make. And it has very little to do with quality of life. (the US for example has a lot very poor people along with a few extremly rich. Gives a high GDP but not a society that's "free and equal for all")

In UN's Human development index (here) the US is #3 after Canada and Norway. But when you compare gender equality and conditions for the poorest part of the population the US drops down to #18th place, among the last of the industrialized world. All of scandinavia for example is a much more wellrounded society to live in - one that doesnt focus exclusivly on profit at any price.

-henrik

Re:Rather a USA-Centric world view, no ?

[Anonymous Coward]

1) America has the largest tax receipts of any country in the world. Hardly a Capitalist utopia.

It also has the largest economy in the world. It's percentage of GNP collected as taxes is much lower then most other industrialezed countrys. (16% of 8 trillion is a lot more (dollar for dollar) then even 50% of 2 trillion)

2) America spends more on its miltary than any other country in the world. What exactly does this contribute to free trade ?

While I would be first to agree that the lobbying power of the military industrilal complex first warned about by eisenhower is too great. The military is frequently used to directly intervene when americas intrests or americas allies (who are usually are trading partners) are threatened.

3) American corporations are amongst some of the most monopalistic in the world. Is this the free market ?

America is the one maybe the only nation that actually says a corporation must justify its monopoly is in the public interest (and meet conditions about not expanding, you know that lawsuit against microsoft?) in other nations paticullary in canada and europe, state enterprises are allowed to be as inefficient and damaging to consumers and the economy as a whole. On this point a little more, monopolies can't flurish in a economy without goverment protection even the much maligned standard oil was disintergrating at the time the goverment decided to enact anti-monopoly regulation (of course you can trace the standard oil monopoly to the monopoly granted to the rail roads by various goverments).

4) When forced to compete on a level playing field, US corporations fail dismally. E.g. the auto industry. You will not see ANYONE driving an
Amercian car in Europe. Like most Amreicans, we would prefer a quality vehicle from BMW, Mercedez-Benz, Volkswagen, Seat, Skoda,Porshe, or even a Japanese made vehichle rather than the American low quality product.

Well, considering Diamler-Chrysler are merged, Diamler-Chrysler owns Mitsubishi, other of the big three own various japanese car companies (lexus and nissan), ford is a huge player in europe as well. Indeed american companies don't market american cars in europe because of narrow minded biggoted opinions such as this, american cars are probably not built aswell but they are built so that as many people as possible can afford them, you also ignore brands like cadillac.

Americas strong belief in capatilism and education allwos american companies to thourly trump any competitor we are far more productive that any nation in europe, machine tools, electronics, computers (funny because they basically originated in britain), optics, fibre optics, medical science, biotechnology, and on and on and on.

5) Exploitation of resources and inefficiency. America leads the world in the destruction of the natural environment. Like the farme who eats his
seed corn, they will surely reap their rewards.

Actually there are many countries with far worse enviromental records then the U.S. even in "enlightened" countries such in europe or canada, canadians by the way waste far more watter then americans per captia, and there corporations are responsible for some verry disgraceful enviromental and human rigts abuses in africa and elsewhere. Infact many of the "enlightened" nations practice NIBYISM (not in my backyard) but there (even state owned) business are perfectly willing to fund or even praticipate in the pilliging of other nations.

>Anyway In conclusion. There is little that the >rest of the world can learn from America. Europe >rejected Fascism in the 40's, America seems
>hell-bent on re-learning the same lesson Europe >learned so long ago. It pains me to see it as I >feel a moral reponsibility (since around 70% of >Amercians come from my homeland).
Europe rejected fascism ? maybe britain did but most of europe was pefrectly happy to run away from the defence of freedom. Not to mention the fact that after we one the war (not of course dismissing the importance of britain, but you needed not just are milltary might but our industrial might to defend yourselves, you know the thing your maligning.) Indeed no good deed goes unpunished we also spent 50 billion dollars rebuilding western europe, yet all we have ever got is grief.

>Perhaps Americans who reject the direction their >society has taken should return to the Motherland >England, to like a more socially acceptable >lifestyle.
Funny, really, what europeans don't really seem to realize that wealth == freedom, you complain about our excess but the excess that allows the even a realitvely poor person to buy a car and have gas to put in it, why is this important well it means that with this car if there are no jobs where the person currently resides can travel somewhere else . Same goes for many other things, computers and internet access for instance.

Re:Rather a USA-Centric world view, no ?

[abelsson]

First you state "Americans like big cars" then "American [sic] is one of the cleanest countries in the world". Cars are one of the major sources of pollution, about 25% of total. Big cars use more fuel, need more material, bigger roads, etc. They pollute more by any standard.

And on a second note.. The US was the country that shot down an international enviromental treaty recently. hell, most USians dont even belive that global warming exists even when most of the world scientists tell them. The US polludes more per capita than any other country. period. And worse than that, it does every little about it. I wouldnt care if you wanted to wreck your own place, except i live on the same planet too. Yes, i've lived in both US and Europe. I found the US *much* *much* worse enviromentally.

The US is a single-issue country (profit über alles) just like most developing contries. Only in long time, stable societies to you see ethical values being a major part of the debate. I'd say europe in general is 50-100 years ahead of the US in the ethical evolution of mankind. Most of europe recognizes that the enviroment, equality and social security is what a society needs to focus on for the next century. Building as many (large) cars as possible no matter what the cost isnt reasonable.

And profit isnt the only thing that matters.

-henrik

Re:Rather a USA-Centric world view, no ?

[SubtleNuance]

healthcare but is definately not uniform and the quality is at best tenious (tenuous maybe?)

Utter bullshite. Ive never had a problem with healthcare here in Canada. If Im sick I get care. Simple. This holds true for 'serious' illness as well (ive had immediate family members with exceptional care during their successfull battles w/ cancer).

a by-product of the large concentrations of people

Bullshite again - The US has high crime beause of its value system. People are more likely to feel justified in their violent acts because it serves their selfish needs (whatever they are) - and that is the #1 value in America: You are the only important thing to yourself - Serve yourself - Consume. America does not have a 'high concentration' of people - look at the other end of the population density scale (Asian countries) and you'll see an inverse violent crime rate to that of the USA.

Get your shite straight.

Re:Rather a USA-Centric world view, no ?

[SpinyNorman]

The US has high crime beause of its value system. People are more likely to feel justified in their violent acts because it serves their selfish needs (whatever they are) - and that is the #1 value in America: You are the only important thing to yourself ..

Interesting insight - I think you may be right.

Re:Rather a USA-Centric world view, no ?

[SubtleNuance]

America spends more on its miltary than any other country in the world. What exactly does this contribute to free trade ?

You're joking, right? How about, for one, the free-flow of oil at market prices? Or do you forget that Saddam dude who tried to take over a large majority of the world's oil supply? If the US hadn't stepped up, you would have a king of the "United Kingdom of the Middle East" by now. Stable economies require a stable world. A strong military is critical to stable economies.

The fact that you feel the 'free flow of oil' or 'stable economies' are reasons to FUKCING KILL PEOPLE is exactly why you are disqualified from this conversation. Twit.

The problem is that Americans like big cars, and the rest of the world doesn't

The problem is that ONLY Americans would kill people so they can drive big cars that needlessly burn gas. The fact that you support a Plutocratic Government to use its Military to subsidize oil prices so you can drive a big car is amazing. When violence breaks out in other places; sane, stable and wise people are concerned for the citizens of the region, and are hopefull to participate in peace. Only Americans see Market opportunities and 'stable economies' as concern in these cases.

Re:Rather a USA-Centric world view, no ?

[Reality Master 101]

The fact that you feel the 'free flow of oil' or 'stable economies' are reasons to FUKCING KILL PEOPLE is exactly why you are disqualified from this conversation.

I forget who said it, but I think the quote is relevent here: "Without economic freedom, all other freedoms are just an intellectual excercise."

We didn't just "kill people", we killed military soldiers invading another sovereign country, which happened to correspond to one of our vital national interests. You'll also notice that Kuwait and Saudi Arabia (who was next) asked for our help.

And before you get on a "so, you only defend countries where you have an economic interest" kick, you are damn straight right. The US is not the world's policeman, but we are going to step in when it's in our best interests to do so.

The problem is that ONLY Americans would kill people so they can drive big cars that needlessly burn gas.

There is absolutely no reason to go back to living in caves, which is the ultimate conclusion to that line of thinking. Big cars / small cars? Hell! Let's do away with cars; that's much more efficient. And then, let's restrict travel because you know that are rarely reasons for such "inefficiency". Ad infinitum. Don't believe it can happen? Please look at the Soviet Union who tried this type of thinking.

Restricting freedom is never the answer. In fact, got news for you: today's large cars pollute far less than yesterday's eurocrap cars. The answer to technology's problems is more technology, not conservation.

--

Re:Rather a USA-Centric world view, no ?

[Reality Master 101]

Cars are one of the major sources of pollution, about 25% of total.

Cite your source on that figure. And Cite a US figure, not the world. The US car pollution standards are much stricter than much of the rest of the world.

Big cars use more fuel, need more material, bigger roads, etc. They pollute more by any standard.

Today's big cars pollute way less than the death boxes of yesterday. Look up the figures. The answer to technology's problems is more technology, not conservation. Restricting freedom is never the answer.

The US was the country that shot down an international enviromental treaty recently.

Damn right. Gee, I can't imagine why the US would refuse to sign a treaty that required the US to implement huge restrictions while paying huge amounts of money. That treaty is primarily money grab by the 3rd world countries.

I found the US *much* *much* worse enviromentally.

LOL! I see you haven't been to Italy. Or Greece. Or hell, try parts of Germany. The Rhine isn't exactly crystal pure. Please cite specific examples of how you found the US "*much* *much*" worse.

I'd say europe in general is 50-100 years ahead of the US in the ethical evolution of mankind.

Do you know why the US cares so much less about the environment and Europe cares so much more? There is a simple and obvious answer. Because Europe is so much more polluted! Duh. Of course people are going to care about something that pertains to their everyday life. The poorest American lives better than the average European in a lot of countries. You are crazy if you think the US has any sort of pollution problem compared to the rest of the world. And I'm speaking of Western Europe, let's not even talk about Eastern Europe.

I'd say europe in general is 50-100 years ahead of the US in the ethical evolution of mankind.

Nope, they are at least 200 years behind. Europe has only lukewarmly embraced the concept of freedom, which should be the underpinnings of any progressive society. Instead, they have chosen to worship the false idol of government, and assume the solution to all problems is more government. The ultimate example of this is health care. When you make it illegal to purchase health care, and the government decides when and whether you get health care, that is one step to fascism.

And no, I'm not a libertarian. I believe government and even (horrors) regulation have their place, but Socialism is an evil that must be extinguished by the light of freedom. And will.

--

Re:Rather a USA-Centric world view, no ?

[leviramsey]

Well, considering Diamler-Chrysler are merged, Diamler-Chrysler owns Mitsubishi, other of the big three own various japanese car companies (lexus and nissan), ford is a huge player in europe as well. Indeed american companies don't market american cars in europe because of narrow minded biggoted opinions such as this, american cars are probably not built aswell but they are built so that as many people as possible can afford them, you also ignore brands like cadillac.

Minor correction: Lexus is a brand of Toyota (which has been involved in deals with GM (I believe the Geo Prizm and Chevy Nova were built by Toyota)) and Nissan is owned by Renault now.

But Cadillacs are pure sh*t... ;o)

Re:Rather a USA-Centric world view, no ?

[TheSync]

Here's another theory: America's rising standard of living has made it easier for families to break up, which has lead to greater illegitimacy and crime. Americans' rising wealth has also created a lackadaisical attitude towards petty theft and minor misdemeanors, which has also raised the crime rate. Throw in the War on Drugs (a folly which could only be truly done in a country as spoiled as the US), and you've got a flammable mixture.

Read Spoiled Rotten.

Re:Rather a USA-Centric world view, no ?

[J Story]

> I've never had a problem with healthcare here in Canada.

Canada's health care system is fraying at the seams. Doctors are leaving for the States, not just for the money, but because of better availability of the best equipment. Remote communities are especially hit by this exodus. Nurses are also seriously short-staffed and over-worked (and this is not helped by US recruiters waving money at those who remain.)

Will the system die? Probably not, but I suspect that economic realities will force a greater government acceptance of private health care.

Sometimes when I consider the brain-dead governments who run the place, I think that the only reason Canada is not a third-world nation is because of our exceptionally close relationship with the US.

Re:Rather a USA-Centric world view, no ?

[dcs]

The US produce more garbage and more global warming gases on a per capita basis than any other country in the world by a LARGE margin.

If the rest of the world produced the same amount of pollutants as the US on a per capita basis... well, there would be no world left.

Re:Rather a USA-Centric world view, no ?

[dcs]

Well, of course the Canadians waste far more water than the americans. They have the world's largest water resources and a relatively small population.

Re:Rather a USA-Centric world view, no ?

[CharlieG]

Let's see, As others have said - They have the US Military - The interesting one is your comment about Japan having a small Military. They do and don't Japan technically doesn't have any military, just the Home Defense Forces, but here is a trivia question for you - What country has the SECOND largest Navy? Yep, Japan. The Japanese military is actually surprisingly large, and we won't count how much of the American military is in Japan. There are HUGE problems with this right now. The people of Okinawa are kinda pissed at the US right now

Re:Capital is imaginary.

[m.o]

So, in 25 years, how are you going to buy milk and bread?

Capitalism hasn't failed everywhere else...

[Moderator]

It's just that everywhere else, people aren't giving it enough time. Capitalism didn't just start one day. It was a gradual process that evolved over hundreds of years in Europe and America. We had time to adapt.

Many people in third world countries want capitalism to bring immediate benefits to their standards of living. You can't go from agricultural to post-industrial society in ten years, folks. People need to give this process time.

--

amazon reviews

[gargle]

Why not read the reviews at amazon, for a more coherent description of what the book is about.

Re:amazon reviews

[SpinyNorman]

Yeah, the /. review entirely glossed over the central thesis of the book which is that successful capitalism doesn't just allow for the accumulation of wealth, but that it also requires infrastructure/laws to allow that accumulated wealth to be mobile.

I've always thought it pretty obvious that the US's prosperity comes from two things:

1) Wealth generation by a continual influs of highly motivated immigrants

2) Wealth spreading by a society that prefers to borrow and spend rather than save

It's funny how so many people think the national debt is a bad thing, when withing reason (e.g. the runup during Reagan's years rather than that of Bush Sr.), it's part of the system that has been so successful.

Re:amazon reviews

[dcs]

It's funny how so many people think the national debt is a bad thing, when withing reason (e.g. the runup during Reagan's years rather than that of Bush Sr.), it's part of the system that has been so successful.

There is a big difference between what the people do and what the government do. National debt has a huge negative impact on the economy, unless someone is financing the national currency (like the world's investors finance the dollar).

War...

[Anonymous Coward]

In A.D. 2101
War was beginning.

CmdrTaco: What happen ?
CowboyNeal: Somebody set up us the Troll
CowboyNeal: We get signal
Captain: What !
CowboyNeal: Main screen turn on
Captain: It's You !!
Katz: How are you gentlemen !!
Katz: All your Hemo are belong to us
Katz: You are on the way to destruction
CmdrTaco: What you say !!
Katz: You have no chance to survive make your time
Katz: HA HA HA HA ....
CmdrTaco: -1 every 'troll'
CmdrTaco: You know what you doing
CmdrTaco: -1 'TROLL'
CmdrTaco: For great justice

No mystery

[ip4noman]

Capitalism is unsustainable, and the incredible growth of homo sapiens have enjoyed over the last 200 years (From 1 billion world population in 1800 to 6 billion today) is due to "spending" a bank account that was accumulated over billions of years: fossil fuels (source Thom Hartmann: The Last Hours of Ancient Sunlight). We have reached the maximum rate of extraction, and this rate will begin to decline, while demand and human population continues to grow *expontentially* (source: Jay Hanson)

If by "capital" you mean money, then follow some of these links to The Creature From Jekyll Island By G. Edward Griffin: Money is not wealth, it is debt, perpetual debt, which can never be repaid (because the interest/usary is not created whithin the system), and thus always leads to bankruptcy, forclosure, "reposessions", sherrif's sale, and military actions, which the author calls modern Alchemy, since this is how the lead bullets of war are converted into gold.

Capitalism supports slavery. Capitalism encourages unsustainable population growth, depletion of natural resources, and the creation of waste products. "Property Rights" are paradoxical, since the enjoyment of this right must deny this very same "right" to another.

Isn't it time we figure out a different economic system that is sustainable, and less violent?

Ob Bill Hicks Quote on Economy:

I'm glad that psilocybin mushrooms are illegal. Because when I took them, I laid in a field of green grass, thinking "I love everything!" I realized that our true nature is spirit, and that it is only illusion that we are apart from God, and that God loves us. So, can you imagine what would happen if everybody started experiencing Universal Love? I mean, how are we gonna keep building Nuclear Weapons when we realize that we are all one? It'd fuck up the economy! -- Bill Hicks

Re:No mystery

[Russ Nelson]

Man, oh man, oh many, you are a hopeless case, aren't you?

By "capital" he doesn't mean money. Capital is not money. Capital is saved wealth. Money is just a thing which is easily tradable. Anything could function (better or worse) as a money. Money, being a thing, is not "debt". Where did you get that crazy idea from? Oh, I see, Griffin. Well, why did you accept that crazy idea into your brain?

Essentially, you are against saving. You would rather that people live like the animals of the woods, eating when food is available, and starving when it is not. YOU are welcome to live like that. Nobody is stopping you. Most people would prefer not to live that way, though. That's why socialists have to use force to get people to live in a socialist society. Note: Sweden (the canonical "socialist" society) is not socialist at all. It is a market capitalist society with high government expenditures. A socialist society is marked by a lack of a market (go read your socialist literature if you think I'm nuts). The extent to which socialists support the market, is the extent to which capitalists have persuaded socialists that socialism does not work.
-russ

Re:No mystery

[localroger]

While I basically agree with your main point, there are some flaws in your supporting argument.

We have reached the maximum rate of extraction, and this rate will begin to decline, while demand and human population continues to grow *expontentially*

We have reached the maximum rate of extraction at current pricing levels. Anyone in the oil industry will tell you there is a huge amount of oil offshore in the Gulf of Mexico; the reason we aren't extracting it is that it is cheaper to import from the Middle East than to build drilling platforms. But as the technology to do deep-water extraction improves and the value of the fuel increases, these sources will be tapped. And they are very extensive -- sufficient, by most estimates I've heard, to power our civilization at its current level for centuries.

And while we do need to achieve negative population growth, experience shows that the best way to do that is to increase individual wealth. The nations with the lowest population growth are all the ones with the highest standards of living.

And for all its flaws (and it has many), capitalism has proven to be one effective tool for increasing productivity and standards of living. It's not the only thing you need, which is one point the reviewed book is making; but it is one thing that can work in appropriate circumstances.

Unfortunately, the current trend even in wealthy countries is for capital to accumulate around the wealthiest at the expense of the poor, which is a sure recipe for reversing the progress we have made toward long-term stability.

Re:No mystery

[the eric conspiracy]

Capitalism is unsustainable

Remains to be seen.

the incredible growth of homo sapiens have enjoyed over the last 200 years

... has nothing to do with capitalism. In fact the capilistic countries have the lowest population growth rates.

human population continues to grow *expontentially*

Bzzzt. Population growth rates are declining. In fact some western countries have birth rates lower than the replacement rate, and are only maintaining their population through immigration.

If by "capital" you mean money,

No, we don't mean money. Any jackass with a printing press can make money. Money existed long before capitalism.

Isn't it time we figure out a different economic system that is sustainable, and less violent?

Sounds good. Do you have any ideas? We've already tried a variety of methods including feudalism, tribalism, and communism.

Capitalism supports slavery.

What capitalistic countries currently use slavery?

"Property Rights" are paradoxical, since the enjoyment of this right must deny this very same "right" to another.

True enough, except that the concept of 'Rights' itself implies that you have taken away something from another individual. For example, my right to life means that you do not have the right to kill me. Are you really proposing that indivduals should have no rights?

Come back when you have a premise that is not filled with logical fallicies and factual error.


MOVE 'ZIG'.

Re:No mystery

[SubtleNuance]

Excellent points - that is the most salient and aware writing ive read in this thread.

Capitalism in its Western incarnation is a straw-man. You cannot spend your capital (oil, ore or mineral) and call it 'income'. This is like my basing my future on the sale of my home - it works for a few months (where im spending the cash that i'd saved into my home) but quickly becomes a problem when I have no other home to sell...

On a similar note - the Capitalist measure of the economy is not a measure of 'success'. The GDP is another display of 'wrong' thinking inherent in the capitalist system. When a person gets cancer - the GDP goes up. When we are in a car crash - the GDP goes up. What about our real goals: happiness, peace, love, understanding, joy and their ilk? I propose we organize a system that only serves those goals.

See a link at Adbuster that deals with some of these ideas - much better than I can explain them ;)

Simply: Join the effort to End Plutocracy.

Re:No mystery

[SubtleNuance]

Capitalism is unsustainable
Remains to be seen.

I would assert that the end of Capitalism is Plutocracy, Monopoly and Fewer Rights for Citizens. These being natural responses to an uncontrolled market economy where the Entrenched Interests change the social landscape to assure their survival (and greater 'success').

America is manifesting these problems now. Massive Transnationals rule the government, Business Issues are the only discussions amoung your 'leaders', the RIAA/MPAA buy laws like the DMCA without anyone (population at large) having any idea how/why, Massive Transnationals set terms to the markets because of collusive business practices.

We've already tried...communism.
Communism has been attacked my McCarthy-inspired Americans. Make no mistake - the Powers That Be(TM) in America used every resource they had to destroy the former Soviet bloc - it did not 'fail' because of Communism, it didnt succeed because of the Actions/motives of Capitalist Yankees.

human population continues to grow *expontentially* Bzzzt. Population growth rates are declining. In fact some western countries have birth rates lower than the replacement rate, and are only maintaining their population through immigration
Western countries are not the only countries on the planet - Population is growing exponentially - and what the Sheeple in those countries are aspiring to is the same level of loathsome behaviour as 95% of American Sheeple. This is a problem. What will we do when everyone in the world tries to 'live' (consume) like Americans?

"Property Rights" are paradoxical, since the enjoyment of this right must deny this very same "right" to another.

True enough, except that the concept of 'Rights' itself implies that you have taken away something from another individual. For example, my right to life means that you do not have the right to kill me. Are you really proposing that indivduals should have no rights?

You might want to take a moment from defending your dogma to actually read his post.
non sequitur:

An inference or conclusion that does not follow from the premises or evidence.

A statement that does not follow logically from what preceded it.

Come back when you have a premise that is not filled with logical fallicies and factual error.

Re:No mystery

[SubtleNuance]

Then everybody can't agree. So we must find a way to make everybody agree, so we shoot those who disagree or place them to linger and die in labor camps

Where the hell did that come from? Why would I care what you are proposing to do to make yourself happy? I wouldnt give a damn. Your rights to seek happiness ends when it interferes with the commons. When you pollute or exploit this is wrong. I would suggest you dont have the right to do that in pursuit of your happiness. When you subvert the purposes of capitalism to control markets/people/other business. I would suggest you dont have the right to do that in pursuit of your happiness.

Its the idea that *YOUR* rights are more important than the rights of the community is what I would be against. Im finding that this concept is what is lacking in the USA - im really thinking this is the fundamental problem. Americans care nothing of others - its a engrained character flaw (and encouraged by your Corporate Government because it serves them) - you simply cannot see the 'other arguments' because you are conditioned to only care for yourself.

Re:No mystery

[Steve B]

What will we do when everyone in the world tries to 'live' like Americans?

Living like Americans inherently includes having the same below-replacement birthrate as Americans. Try to think through the implications of your statements.
/.

Re:No mystery

[YU Nicks NE Way]

As the great American Song says: "This land is your land, this land is my land..." It's yours, it's mine, it's ours. There is ownership.

You know, Arlo Guthrie tells a great story about coming home from school one day, and singing that song to his father. Woodie responded, "Did you know that I wrote that? Do you know the rest of the song?" Arlo didn't -- but he still sings the whole thing whenever he performs it in concert these days.

You might want to go look up the original lyrics. In gross violation of Judge Kaplan (but in tribute to what Guthrie himself would have wanted...) here's a link.

Re:No mystery

[localroger]

You do realize that our present consumption levels are only a shade of what would be if the entire world consumed like the First World (the US especially). More importantly, with population growth on top of that, making any comparison of current to future growth is silly.

Well, yes. But as you went on to say...

Of course, this does ignore the fact that maybe fossil fuel consumption will decline with technological advancement

Which in fact is exactly what has been happening. There is also the fact that the entire Gulf hasn't been explored. As one geophysicist told me, "every time we go out there, we find more than we thought could possibly exist." It's not widely reported outside of the industry, but most geophysicists no longer believe that all fossil fuels have fossil origins. Some of what we know is there simply couldn't have gotten where it is if it were of fossil origin.

There are large areas of the world where we don't look for fuel because the theories say it's a waste of time. But if there are geological as opposed to fossil sources for petrochemicals, there may be vast untapped fields of gas and oil in places we just aren't looking, such as trapped beneath continental shield plates.

While there are good reasons for limiting population growth, lack of fuel is not currently one of them. (Pollution from use of the fuel we have is IMO somewhat more important.)

Re:No mystery

[the eric conspiracy]

What capitalistic countries currently use slavery?

That depends on how you define slavery.

Indeed. One could define slavery (or any other term) as green cheese and make an argument based on that hypothesis.

I take the more common definition. Slaves are a class of human beings who are bought and sold as property, and are excluded from the protection, rights and priviledges of citizens.

A slave cannot quit his job and go work for another company A slave does not get bills. A slave cannot decide to start his own company. A slave cannot go to night school to learn a new skill. A slave does not own property; he IS property.

Trying to distort the meaning of the word to cover a free citizen who works for a living does a great injustice to those who were truly exploited as slaves.


MOVE 'ZIG'.

Re:No mystery

[gus2000]

You have masterfully proven the point: the people working in Kathy Lee's sweatshops and weaving rugs in Pakistan so that the latest .com millionaire may furnish his latest posh loft meet almost all if not all of your criteria for being a slave.

Oh but perhaps you are going to tell me that it is not the Western capitalist companies that are responsible for that exploitation, it is the non-capitalist local governments... yeah right.

Re:No mystery

[the eric conspiracy]

Population is growing exponentially

Bzzzt AGAIN. Population is NOT growing exponentially. The growth rate IS DECLINING

In the 1960's the annual growth rate was about 2%. Right now it is about 1.5%. By 2015 most estimates place the number at 1%. In another 30-40 years it is expected to be ZERO.

http://newmedia.avs.uakron.edu/geology/ge/ch/pop /p growth.htm

Sheesh.

MOVE 'ZIG'.

Re:No mystery

[the eric conspiracy]

You have masterfully proven the point: the people working in Kathy Lee's sweatshops and weaving rugs in Pakistan so that the latest .com millionaire may furnish his latest posh loft meet almost all if not all of your criteria for being a slave.

Not even close. The people working in these developing companies are not the legal property of their employer, nor are they legally non-citizens of their country. While we may find their working conditions deplorable according to western standards, these workers are generally better off than their neighbors in terms of standard of living, and are working for these companies voluntarily.

Once again, the fact is that these people are NOT slaves, and to classify them as such does great harm to the memory of the real horrors of slavery.

perhaps you are going to tell me that it is not the Western capitalist companies that are responsible for that exploitation, it is the non-capitalist local governments... yeah right.

I would generally agree with the idea that western companies that treat offshore workers poorly should be condemmed. However there are plenty of companies that treat offshore workers quite well too, so that the idea that this is an inevetable result of capitalism is very flawed.

MOVE 'ZIG'.

Re:No mystery

[nomadic]

Americans care nothing of others - its a engrained character flaw (and encouraged by your Corporate Government because it serves them) - you simply cannot see the 'other arguments' because you are conditioned to only care for yourself.

It's the philosophical basis for our culture, and while it may cause problems, in many of our minds it's worth it.
--

Re:No mystery

[TheSync]

Capitalism is unsustainable, and the incredible growth of homo sapiens...is due to "spending" a bank account that was accumulated over billions of years: fossil fuels (source Thom Hartmann: The Last Hours of Ancient Sunlight). We have reached the maximum rate of extraction, and this rate will begin to decline, while demand and human population continues to grow *expontentially* (source: Jay Hanson)

There have been gloomy talk about running out of oil for a long time:

1885, U.S. Geological Survey: "Little or no chance for oil in California."

1891, U. S. Geological Survey: Same prophecy by USGS for Kansas and Texas as in 1885 for California.

1914, U. S. Bureau of Mines: Total future production limit of 5.7 billion barrels, perhaps 10 years supply.

1939, Department of the Interior: Reserves to last only 13 years.

1951, Department of the Oil and Gas Division: Reserves to last 13 years.

The truth is that as oil reserves are continuing to increase because new technology is applied to new areas.

We don't actually know 100% how oil was formed (no one has ever been able to produce the equivalent of crude oil, yet we can make man-made diamonds). One particular theory claims that the lower crust of the planet is bathed in hydrocarbons from the time of planet formation, and the oil we see is only the little bits that get caught in traps near surface. In that case we'd never run out of oil. Who knows?

Nobody knows. Nobody knows how much oil is left, until a well runs dry. You can guess about it, but you are often wrong, because we can't count the drops of oil in every crack and crevice thousands of feet below the ground/ocean. Then once it "runs dry," you begin pumping in water to displace more oil, and you don't know how much more will come out. Nor do we know how much natural gas might be present, nor oil in oil shales.

I suggest reading Julian Simon's When will we run out of oil? Never!.

Other interesting tidbits: The trends in energy costs and scarcity have been downward over the entire period for which we have data. These "high oil costs" Americans complain about today are, after adjusting for inflation, not much different than 20 years ago. Energy has become less and less important as measured by its share of GNP.

And let's say we do run out of oil. Well, we'll have to get by somehow, perhaps nuclear/fusion using batteries, hydrogen, or other chemical energy storage technique. Long before the oil really runs out, there will be an economic incentive to build these devices (well, there will be in capitalist countries anyway). Looking at the price of oil right now, I don't expect to see them much in the near future.

Capitalism encourages unsustainable population growth, depletion of natural resources, and the creation of waste products.

The first part of this is really wrong. Capitalism increases the supply and efficiency of use of mineral resources. It also increases the size of sustainable populations. You may also want to compare starvation rates of US versus Mao's farming policies that killed 30 million people by starvation.

Capitalism does increase the creation of waste products, but as you mentioned, it does produce a market incentive to deal with them in a halfway reasonable way. The greatest environmental problems exist in situations where there is not ownership (waterways and multipoint atmospheric pollution).

Re:No mystery

[TheSync]

You have masterfully proven the point: the people working in Kathy Lee's sweatshops and weaving rugs in Pakistan so that the latest .com millionaire may furnish his latest posh loft meet almost all if not all of your criteria for being a slave.

Oh my, send those sweatshop workers back into the fields! Why work all day making sneakers and money for your family when you can do back-breaking farm work under the hot sun to make LESS MONEY growing coffee beans for dot com workers.

These sweatshop workers must be really stupid! Who would give up the hazards of working in the fields?

pound sterling - silver

[Speare]

To explain, in the UK one Pound Sterling used to be one pound of gold by weight.

pound sterling on brittanica.com

sterling on dictionary.com

Actually, a Pound Sterling was more typically a pound of silver, not gold, in value. Hence the term 'sterling silver.' The term 'sterling' refers to purity of gold or silver, but the Pound was of silver specifically.

Re:pound sterling - silver

[SpinyNorman]

Thanks for that pound sterling link!

I'm a Brit (living in the States now), and I'd never heard of the sterling coins, or the derivation of "pound sterling"!

It's interesting that the 240 sterlings created from a pound of silver in 775 - presumably a somewhat arbitrary number dictated by the size of the coin, survived for over 1000 years! More the shame that decimilization ended that piece of history... reading that actually makes me care less now whether the UK adopts the Euro, since the decimilized "pound" is only part of history in terms of name alone.

BTW, when did the pound cease to be silver backed? I seem to remember that the old pound notes carried the "I promise to pay the bearer, upon demand, the sum of one pound" verbiage right up until the end.

Re:pound sterling - silver

[sql*kitten]

Hence the term 'sterling silver.' The term 'sterling' refers to purity of gold or silver, but the Pound was of silver specifically.

The word "Sterling" is a corruption of the word "Starling" meaning "small star", which was the symbol on the most reliable of medæval currencies.

Theories of development

[skwang]

The final section = of the book gives sober and well thought out step-by-step directions to lift = people out of poverty and invisibility, again based on experience in field = programs, rather than ideology.

There are two main theories on how the developing world should move into the developed world. Currently, only 30 countries are considered "devloped," while the rest are divided among groups such as "developing," "not developing," and "less-developed."

• developed countries = first-world = industrialized nations
• developing countries = third-world

1. Modernization theory (MT)

   MT prescribed that economic development requires the rejection of traditional behavior and orginizations, and acceptances of new behavior and orginizations that futher economic growth. The culture of a nation must change to the accepted western ideas of devlopment. A partial list of the requirements that Modernization theorists agree on include:

   • Education of the population
   • Acceptance of science, technology, and the scientific method
   • increased secularization/decreases religious tradition
   • urbanization
   • division of labor
   • rule of law
   • merit based system of rewards (as opposed to a system where people of a class or birthrite are rewarded)
   • social mobility
   • diversity
   • innovation and change

   In a nutshell, a acceptance of western culture and western sytle economic and policital thought lays the foundation of economic development.

2. Dependency theory (DT)

   DT is a ideology that critisizes the MT approach. Two main tennents of Dependency theory: The development of third-world nations did not resemble the development of the west. The west's development for instance did not have external influences. The second tennent is that developed countries exploited the third-world in their own economic rise. Therefore any economic structure that may exist in a developing country is set up to enrich the industialized nations, not develop the third-world nation.

   Dependency theorists see the western exploitation of third-world nations as the primary roadblock to economic sucess. By removing the foundations rooted in imperialism, third-world nations and develop the economic structure that moves them forward.

I have not placed any value judgements on these two theories. All I can say is that I agree with the statement that there are no easy answers to how to develop the third-world.

Re:Theories of development

[Russ Nelson]

Well, no, there are no easy answers to how to develop the third world *quickly*. The easy answer is "Do it like we did it. Take several hundred years of negotiations, invention, and saving". Most people are looking for an answer which produces results faster than that.
-russ

Re:Theories of development

[HiThere]

That's not how we did it. The way we did it depended on easily exploitable resources. Ask the indians, either east or west. We started off (15th century?) slightly more adept at mechanism than those we encountered (cannon and ships, mainly) and leveraged that into various empires that exptracted resources in a way that benefited us more than those of the customers. (This was the basic cause of the US war of independance.) This extraction of resources was used to pyramid the mechanical advantage. This process continued up through WWII.

Since WWII the economic corporations have become increasingly decoupled from the nations that created them (the degree varies largely with the corporation). But they still act largely as resource extractors and pyramiders.

Companies frequently act in concert with their principles for two or three generations of ownership, but publicly traded corporations are weathervanes tuned to maximize the power of their managers, directors, and stockholders (in that order).

Caution: Now approaching the (technological) singularity.

Re:Theories of development

[leviramsey]

And the interesting part is that Taiwan and Korea were, in the 1960's and 1970's two of the nations most receptive to sweatshops.

Today, there are few in those countries, and the populace has become well educated and affluent.

Meanwhile, other nations, most notably India, refused to accept sweatshops as a means of building economic infrastructure. India was marginally economically better off than S. Korea and Taiwan in the 1950's and is now far worse off than those countries.

I realize that sweatshops aren't a good thing, by themselves.

However the biggest asset that a developing nation has is it's population (though in a few cases, location can be a bigger asset). The people in developing counties aren't apt to be educated, and by the definition of the term, lack assets that are easily liquidated. The labor of the population is the asset of the nation. Sweatshops provide a relatively efficient means of converting that asset into more liquid assets. These assets can then be used to move away from sweatshops.

I'm not that non-sweatshop approaches do not work. I am saying that they do not tend to work as quickly as the sweatshop option.

Re:Theories of development

[Russ Nelson]

Not true. The Romans had all the forests and coal of europe. It's not resources.
-russ

Re:Theories of development

[Russ Nelson]

Why didn't the Romans manage to do what we did? Why didn't the Chinese? Why didn't the Indians? All of those societies were far more developed far earlier, and yet none of them managed to conquer famines. Your theory doesn't explain their lack of development.
-russ

Re:Theories of development

[Ryandav]

what's your point? Rome, as in, conquered the known world, Rome?

Re:Theories of development

[armb]

What theory, and what have the Romans got to do with it?
I didn't suggest that anyone with an empire would become developed, or that it was necessary to build empires to become developed, merely observed that empire building/colonization/expansion was part of _our_ development process (along with the negotiations, invention, and saving, which is why I said "Also").
That rules out "just copy us" as an easy answer for the third world. If have a time machine, maybe you could get it to work for the Romans, Chinese, or Indians.

--

Capitalism and culture

[Alien54]

It is interesting to examine the connection between the material success of a culture and the values of the culture itself. This is just another angle on the material of the book itself.

This shows up in many controversial areas.

For example, take the immigration from poor areas of the world to the richer areas of the world. The question here is how the culture of these immigrants is different from the country they are going to, and how important is this differance.

For example, if you have a town or village where the immigrants predominate, and have become a political force, what does the community look like? Does it look like and reflect the country that they are in, or where they came from? Typically, it looks like where they came from.

The problem is when this results in the same conditions that they left in the first place. Actually, it never gets that far, because of local ordinances, etc. but it does produce dramatic culture clashes. Southern California is an example of this. Xenophobia and prejudice are easy to develop under these conditions because in a democratic society, those moving in want things their way, similiar to what they are comfortable with, the way they knew it in their former homelands.

A less touchy example is when rich successful people buy a house in the country, after having lived in the cities all their lives. They get all freaked out by things like the smells of the local farms, and complain to the local town council, or whatever.

This becomes important when you are talking about things like how people deal with the basics of their lives, the economics, and how they create their own community.

Part of the problem is that many lack the lifetime of education in the culture of the country the aspire to, thinking that they must hold on to what they know already out of pride. They think in terms of either/or, or at least some political leaders do. The better would be knowing both.

This gets flipped on its head when we take this into another context completely. For example, the arena of the software market, open source vs proprietary software, etc.

As some may say, this is another can of worms entirely.

Re:Capital is imaginary.

[truelight]

You cant build a house from dollar bills either, and you can't eat coints. I find it rather pathetic that we should pay for thing such as living space and food. Those things should be provided by society for you. That way people could focus on achieving greater things, instead of worrying about if they are going to pay the rent.

Why not everywhere, then?

[Russ Nelson]

So why is capitalism not ascendant everywhere? Your theory doesn't explain all the facts.
-russ

Re:Why not everywhere, then?

[SpinyNorman]

Capitalism is displacing communism in the former USSR, eastern europe and even china (more slowly), so I think it's a little early to say that it's darwinian progress has halted.

Re:Why not everywhere, then?

[YU Nicks NE Way]

How do you know that capitalism isn't actually either ascendent or in ascent everywhere? How are you measuring it's status among the evolving economies outside the developed world?

One of the consequences of Da Soto's analysis is that "capitalism" is undermeasured in those economies. The shadow economy is rabidly competitive and fiercely price driven -- a very classical capitalistic system. If, as Da Soto argues, the shadow economy is not counted in your market analysis, you'd see only the failure of the grand projects, but miss the success of the petite (in this case, tres petite) bourgeoisie.

Money will always exist.

[Russ Nelson]

"Money" is just something that people generally will trade anything for, and will accept in trade for anything else. Money, being a thing, has its own intrinsic value which, like anything else, goes up and down in price. Money will always exist, because it is needed to keep the cost of trading things low.

Read Von Mises' _Human Action_
-russ

Oversimplification ....

[LL]

If you follow the Austrian School of Economics (yes, there are competing schools of thought e.g. Chicago School of Rational Economists, etc), then you realise that capital is a heterogeneous structure of productive elements. People tend to confuse the accounting unit (monetary value) with the tangible/untangible asset (essentially a service generating a revenue stream). Why has the West succeeded as compared with the East? There are a lot of competing claims but I will offer a few generic observations:

- alienation - or the separation (and resulting specialisation) of powers. The modern corporation essentially has 3 functional components - owners (shareholders), governance (directors) and operators (managers). Through legal mechanisms, the transfer of powers and associated trust allows more complex structures to be established. Due to historical baggage of feudal governance structures and patron-style relationships, the East has yet to develop a culture which separates the State from the individual biases. Even if you look at places like Singapore, it is essentially a city state driven by a family core (think Italty) and as a result some financiers are rather disparanging of the capital utilisation rate (compare growth in TFP against other states after discounting human and capital mobility). The alienation eliminates (at at least checks to a large extent) influences such as religion, tribalism, etc from economic factors. The downside is that the government is less powerful than many people think.

- agency costs - consequent to this is how do you ensure that the remote agents (managers/financial brokers) work for your aims (wealth creation) rather than pissing off to South America with your loaned capital. Again the rise of a professional management class as distrinct from a family owned firm with a tendency to treat OPM (other people's money) as personal disposable income allows larger scaling of enterprises. This has been aided by the significant reduction in the cost of internal communications due to technology and now you have firms which number employees in the hundreds of htousands (as compared with 100-1000's early last century). Scale matters and family firms don't have guarentee of talent.

- universal education and democratisation of capital - one of the biggest hinderances towards an efficient market is information asymmetry. What you don't know *WILL* hurt you when it comes to insider information, scams, and other forms of white collar crime. By giving the middle class the chance to pool funds into mutual investments, and the transparency to assess companies in their own right, a more accurate picture of the economy can be reflected in the prices that people are willing to lend at. If you take a look at the share-market in say China/HK, if you are not a professional market specialist, you might as well be gambling at your local casino as minority shareholders get screwed big-time.

- credit creation - the unbundling of the currency from any tangible asset such as the gold standard. This is a rather contentious fiscal "innovation" as it creates inflation (e.g. 70's) but the upside is that greater individual risks can be undertaken (with resulting higher returns). There are some serious side effects (financial crisis/flutuating financial securities) but the industry has developed more advanced liquidation techniques to reallocate capital as a result. As a result, the US financial markets have been more efficient at directing capital to product uses (c.f Japan industry boondoggles) despite its current lower (negative?) savings rate.

I'm sure any professional accountants and economists will harp on about a number of other factors such as anti-trust law (one advantage over Europe), intangible property rights (branding, etc) or derivatives to transfer/concentrate risks but IMHO the above are the main structural elements. This is not to say that all is milk and honey, governments, corporations and individuals have been known to screw up but at least the system has a chance to self-correct. However, it should be noted that people in other countries are not stupid and they can read the books on financial as well as any other capitalist. It also discounts certain elements such as social capital whcih is prized much more highly in the East due to higher population concentrations. The other potential problem I see is institutional arrogance ... just becaus you are successful now doesn't mean you will always be right. Deeming couldn't convince the American manufacturing industry to take his ideas seriously and as a result the Japanese have now supassed the US in that sector. Given the huge population mass and desire of normal people to improve their lot, there's no reason why India couldn't overtake the US in software services or the Chinese in Engineering Knowledge. In short, the future is unpredictable but a rising tide raises all boats.

LL

Nonsense.

[jcr]

Money is not debt, money is a medium of exchange.
Debt is an obligation on the part of one person to pay something (usually money, but it can also be labor or some commodity) to some other person.

-jcr

Money is not Capital

[SimonK]

The book being reviewed is about capital. Your comment is about money. Capital is productive property, and as such can consist of ideas, land, machinery and even personal skills in some views.
Money is a reliable store of value that is accepted in exchange for other good.

Both capital and money are social realities: there's nothing "imaginery" about it. If I try to pay for dinner using a turnip, patent water or enclose the center of London to graze my cows I'll soon discover that imagination is not enough.

The Cult of Capital...

[The Original Bobski]

...would have been a better title for at least the alliteration, besides being appropriately descriptive.

When do you own the land you are living off ?

[mami]

Seems to be a great book and can't wait to read it. Reminded me of observations in an Central African village where land ownership (of tropical rain forest land) had not yet been recorded.

Land is considered as being owned, as soon as a man is able to own a woman, who can cultivate a piece of land and provide food for survival for the man and her children.

The man, being asked if he owns land, would say yes, as long as he owns the labor provided by the woman.

The woman would say she doesn't own land, but she is paid for her labor in being allowed to eat and survive on the fruits of her labor. If she is able to produce more food than the family can eat and is able to sell or trade food for other goods then the struggle who owns the traded goods (or the money she got from the sale) starts.

It seems mostly dependent on how much labor the man has put in to cultivate the land himself. If he did, he will claim ownership of the profit made by the woman's labor, if he didn't and the woman was able to make a profit out of her labor, she considers the profit hers, but not the land itself.

If the woman doesn't work the land anymore, the land isn't considered worth anything and no ownership of the land itself is claimed by the man, but certainly the worth of the potential labor inherent in the woman, is still being claimed to be owned by the man.

In this context it makes sense that the capital of the man is measured in how many women he owns.

The moment an international company comes to the village and discovers something precious to the industrial world in the soil (gas, oil, uranium) and wants to exploit the land, the land will be claimed by the native population as being owned by them. The native population will request recording of the land's ownership, without any consideration of the ownership of women's labor. Because it immediately becomes clear that the profit out of the company's labor is higher than anything the women's labor could generate.

The ownership of the land therefore seems to be defined by who owns the labor put into the land to generate a profit out of it. As soon as the profit is more than just the food to sustain survival of the native population recording ownership takes place.

When Lincoln requested in the Homestead Act that anyone who claimed ownership of the granted acres of land must prove within five years that he "worked" the land and generates value to that land, this seems to reflect that the real capital is reflected in the labor you put in to the land to generate something of value which can be traded and not in the land per se. The native Indians never claimed to own land ( I think), but they fought wars for their tribes territories. In the terms of de Soto, they barked quite a bit.

This would basically mean you always claim ownership to what you produce with your labor. And any person will always claim that much land as his own land, as he needs to grow food to survive. We always start barking if someone tries to take that away from us and we should.

Wuff, wuff, I am off to the bookstore. Thanks for pointing this book out to us.

E-gold is a great idea, but...

[jcr]

I'm afraid that its impact will be negligible until and unless a national government somewhere issues a gold-backed currency.

Imagine for a moment, that South Africa issued a digital Krugerrand.

The DKR would be a nice, long number, and if you present it at any branch of any South African bank worldwide, and you're the first person to present that number, they hand you the coin. Various cryptographic protocols can ensure that you're very unlikely to simply guess a valid number.

South Africa would make a fortune on the seniorage, and all of their gold buyers then have a currency available which is not inflatable. Once people get used to the digital gold coin, then we can start seeing digital currencies backed by any other kind of commodity or service (say, Kilowatt hours, or BTU's of home-heating from somebody's natural gas pipeline.)

Ultimately, it will benefit the whole world to have currencies that simply aren't subject to manipulation for political ends, that rise and fall against each other in response to actual market conditions.

-jcr

Re:E-gold is a great idea, but...

[jcr]

The reason I suggested South Africa, is because the Krugerrand is such a well-known "brand name", and I also believe that SA isn't likely to give a damn if the USA objects to the existence of such a currency.

BTW, since your system requires some heavy-duty security, I suggest you take a look at the Extremely Reliable Operating System (EROS), on the web at www.eros-os.org. I'd hate to see a monetary system get compromised by a script kiddie.

-jcr

Cultural Relativism bs

[AntiBasic]

This book shows something that is highly politically incorrect. A lot of it deals with "cultural relativism" thats been all the rage by conformist rebel liberals for the past twenty years or so. Some cultures facilitate and nurture progress exponentially faster than others. Yes there are other externalities that have hindered progress but thats like saying everyone is fat because of a glandular problem.

Now this isn't to say that race X is superior to race Y (as many drones are quick to play the race card). But a society that has perfectionist attitudes doubled with a "keeping up with the Jones'" outlook have and do progress faster.

Adaptation is necessary for progress. The Europeans took a lot of the practices from the Muslim world under Sulliman(sp?). And before that, the Muslims copied the Indians who were benefitting from the Oriental societies who were the mightiest of the time. Think where we would be if Pope Sylvester the II hadn't been educated by the Muslims; he's the one who introduced arabic numerals to the west. The western world has only been dominant now for at most 500 years (and some would say for less).

Another instance is with the US and Japan. Japan was still a feudal society until the end of the 19th century. The Americans came into the Japanese harbor and let off some cannons. The Japanese were impressed. They realised their ways were inferior to the industrialized western ways. They sent their scholars to the US and Europe to learn all that was possible. And after 40 years they were as advanced as any western society.

Re:Cultural Relativism bs

[AntiBasic]

You brought in braindead consumerism which is immaterial to the argument. The constant advertisements are an eyesore. But the ones here in the good ol' US of A are nothing compared to the bombardment I saw in the UK and France. Advertisements on all over soccer jerseys, a redundancy with TV commercials, and coating of the underground with them as well. Alas, they are a bi-product of collusion and oligopolies.

I'll be right along your side bringing an end to NBC's Just See TV with Friends and Fraser, the extermination of SUV's and their owners, et al.

Yes, you have very valid points depicting the degradation of a society but they are misplaced in this particular topic.

Speculative Capital

[MeanGene]

For a very unorthodox take on the modern capitalism, I suggest "Speculative Capital (vol.1) - The Invisible Hand of Modern Finance" by Nasser Saber. You can read parts of the book here.

Briefly, the author explains the evolution of different forms of Capital: merchant, industrial and, finally, speculative. It is the "Speculative Capital" which scouts the planet for instanteneous profits and has the potential to destroy the whole system as it puts on larger and larger bets.

Ever increasing volatility of Nasdaq, well-publicized devaluation of British pound commonly attributed to George Soros, meltdown in Southeast Asia, and, most recently, Turkish devaluation are the symptoms of Speculative Capital.

Check out Saber's website for better explanation of the subject.

money is an agreement

[zerone]

Bernard Lietaer at transaction.net has plenty of interesting ideas about money, drawn from his involvment in the global monetary system five ways: from a multinational corporation to a developing country viewpoint, from an academic to a hands-on central banking and currency speculation viewpoint.. He concludes that greed and fear of scarcity are in fact being continuously created and amplified as a direct result of the kind of money we are using, and that we can use the 'net to create abundant, sustainable alternatives.

The trick seems to be to limit "money"'s capacity as a *store of value* and so expand it's use as a *medium of exchange.*

Silvio Gissel's "demurrage currency" model does this. Demurrage charged currency restricts a user's freedom to hoard short-term gains, and coerces users to invest in more *sustainable* productive actions in the long run. (Demurrage currency devalues with time, so it spreads around faster, increasing in velocity, and hence, ironically, value.

barataria.org used to have good info on the famous Worgl experiment, whose success caused the Austrian Central Bank to stomp it out. "The traders took no risk in accepting Wörgl scrip as it was completely backed by the national currency loan which the mayor had obtained from the savings bank and left on deposit there. This enabled anyone holding scrip to swap it at any time for 98% of its face value in national currency. Very few people appear to have made the exchange because at 2% it cost more to do so than to pay the 1% monthly re-validation fee, but any local money which was returned to the bank or paid to the council in taxation was immediately re-launched into circulation in the town."

IHMO, "money" is an elemental "code" that instructs most of our trades.. I look forward to new definitions and arrangements of it.. Redefined, it can promote cooperation over competition, and suit non-zero-sum increasing returns in network effects (ie free ideas grow more valuable as more people use them)

"Imagine how creative, how productive, how ecologically benign our businesses could be if we ran them according to the design principles of the rainforest. With thin soil, few nutrients, and almost no resources, rainforests could never qualify for a loan. Yet rainforests are more productive than any business in the world, home to millions of species of plants and animals, so perfectly mixed that they sustain one another and evolve into ever more complex forms." - Taichi Kiuchi

Money will never go away

[SpinyNorman]

Money will always exist as an intermediatory for direct barter. The internet may add new forms of money such as Mojo Nation's "mojo" or PayPal's trust based $ equivalents (it's not a bank, so the system is based on trust in PayPal), but it will never do away with the fact that I may want bread today and not have the MP3 files that the bread-owner would like in exchange... so I give him the exchange medium money, which he can trade for MP3s tomorrow with someone else.

Re:Capital is imaginary.

[ttyRazor]

All social constructs are imaginary. It's the fact that everyone else shares the delusion that makes them worth something

great rebuttal

[Preposterous Coward]

I was going to say all these things, but not only did you beat me to it, you did it better than I would've. I can't help but adding a couple of supporting points:

Thomas Malthus made the exponential-population argument more than two centuries ago. Paul Ehrlich did it again in 1969, claiming in his best-seller The Population Bomb that "We have already lost the battle. No matter what crash programs are instigated at this time, they will not be enough to prevent a worldwide famine of catastrophic proportions in the next ten years. Billions of people will die." Whoops. (Here is some information on the late Julian Simon, who repeatedly and famously debunked such bogosity.)

Capitalism encourages unsustainable population growth, depletion of natural resources, and the creation of waste products.

Aside from the fact that it's not clear that human population growth is indeed "unsustainable", you could replace "capitalism" with many words, including "life" itself, that would result in equally true statements. Rabbits, rats, and cockroaches, for example, do not practice capitalism (that I know of :-), yet they practice unsustainable population growth (to the extent permitted by the lack of predators), depletion of natural resources (food, oxygen, etc.), and the creation of waste products (turds, CO2, etc.). The same is true even of lowly bacteria, except that their "natural resources" and "waste products" are rather different than ours -- which merely serves demonstrates that one lifeform's "waste products" are another's "natural resources".

Incidentally, I could easily argue that lack of capitalism promotes slavery. The absence of property rights essentially means that others can usurp the fruits of your labors whether you like it or not. It's less direct than literally buying and selling human beings, of course, but it's not at all dissimilar in principle.

What is capital?

[Eric Green]

"Capital" is the goods and services produced by an economy. "money" is something issued by government (usually) that people use as an easy "short-cut" for exchanging goods and services. Money has no inherent value of its own, as can be noted by the experiences of the Weirmer Republic and Yeltsin's Russia, where the mark and the ruble (respectively) became worthless toilet paper due to being overprinted by the government, and thus people moved to other methods of exchange (barter, mostly). Money's only value is in how many goods and services it represents.

All economies have capital. Capital is what we eat, is where we sleep, is what we wear. Even communist societies have capital. They merely assign ownership of that capital to the State. Even socialist societies have capital. They merely use the government to reassign ownership of some of that capital based upon various principles of fairness or equity.

"Capitalism", as you use the term, is a misleading abbreviation of the term "free-market capitalism", which is where ownership of capital is vested in individuals and these individuals vie to increase the amount of capital that each of them owns. This has proven to be very effective at increasing the amount of capital in a society. There are costs to "pure" free market capitalism, though. In the short term, "pure" free market capitalism would have business owners creating unsafe workplaces and polluting the environment, because in the short term those result in more profit, for example. And there are always winners and losers in free market capitalism, and the question of what to do with the losers (those whose skills and abilities do not have value enough to provide them with food and shelter) remains. Thus Carl Marx's criticism of the free market capitalism of his day was quite on target. Thankfully, we do not live in a "pure" free market economy today, but, rather, one which is moderated by government. The extent to which a government should intervene in a free market economy is always an issue, but even the most die-hard free market capitalists admit that the economy would collapse if not for government interventions such as, e.g., chartered limited-liability corporations (a government-enforced invention, otherwise shareholders would be liable for the misdeeds of corporations and would not invest money in corporations), court systems (which allow settling business disputes without guns, well, usually, anyhow), and guarantees of the safety of the money supply.

-E

Who says that it is not?

[Eric Green]

I don't know of any country (other than perhaps North Korea and Cuba) where free market capitalism is not the primary producer of wealth. So why are you saying that it's NOT ascendant everywhere?

There are countries where free market capitalism is not very efficient because either they have no effective government (Russia, Somalia), or because their government is corrupt (Kenya) or because their government is incompetent (Peru). Still, the majority of wealth in those countries is created by entrepeneurs practicing free market capitalism -- creating goods and/or services and selling them on a free market. This is difficult in countries that lack a stable money supply (Russia) or government support for private property (China), but it's interesting to note that China has no food shortages because private farmers produce more food than all collectives combined, despite controlling a quite small percentage of the land.

Remember, "capitalism" is not stock markets and such. It is the trading of goods and services in a free market, rather than the forced redistribution of goods and services by a government entity. Wherever there is a village market, there is capitalism.

-E

Re:Who says that it is not?

[leviramsey]

Remember, "capitalism" is not stock markets and such. It is the trading of goods and services in a free market, rather than the forced redistribution of goods and services by a government entity. Wherever there is a village market, there is capitalism.

I believe you're mistaken. "Free market" != "Capitalism". Capitalism is predicated on a free market in capital.

It's entirely possible to embrace free markets without embracing capitalism. It could be argued that the Green Party seeks to do just that, as do "Third Way" liberals (to combine a Tony Blair term with the North American definition of "liberal").

So many errors, so little time

[Ars-Fartsica]

1) America has the largest tax receipts of any country in the world. Hardly a Capitalist utopia.

The United States has considerably lower tax rates than most European countries. As to how this creates larger tax revenues, investigate the Laffer Curve.

2) America spends more on its miltary than any other country in the world. What exactly does this contribute to free trade ?

What do military expenditures have to do with free trade??

3) American corporations are amongst some of the most monopalistic in the world. Is this the free market ?

Yes, it is. It is not illegal to hold persuasive market power in any industrialized nation, as long as legal means were used to obtain market power. At least the government doesn't force citizens to prop up big industry, like in Europe.

4) When forced to compete on a level playing field, US corporations fail dismally. E.g. the auto industry. You will not see ANYONE driving an Amercian car in Europe. Like most Amreicans, we would prefer a quality vehicle from BMW, Mercedez-Benz, Volkswagen, Seat, Skoda, Porshe, or even a Japanese made vehichle rather than the American low quality product.

Ha! You moron! Volvo and Saab and Jaguar are owned by American companies. Do some research! How many English automakers are still owned by the English?

5) Exploitation of resources and inefficiency. America leads the world in the destruction of the natural environment.

Wrong. China and even Canada are, on a per capita basis, more wasteful of resources.

Ugh! More drivel. Please read.

[Ars-Fartsica]

First you state "Americans like big cars" then "American [sic] is one of the cleanest countries in the world". Cars are one of the major sources of pollution, about 25% of total. Big cars use more fuel, need more material, bigger roads, etc. They pollute more by any standard.

This is a ridiculous generalization. How about nations that still use leaded fuel, like China? Leaded fuel is far more polluting that unleaded fuels used in industrialized nations.

As it stands, every environmental account will display quite clearly how air quality in the US has risen dramatically in the last twenty years with the advent of cleaner fuels - even cities like Los Angeles are dramatically less smoggy.

I'd say europe in general is 50-100 years ahead of the US in the ethical evolution of mankind.

Ha! What a crock of shit! Lets recount the burning of immigrant homes in Germany, or how about the inability of the major European powers to do a damn thing about the Balkan conflict? Time and time again Europeans have looked to the US to handle major humanitarian efforts. Europeans are inward looking protectionists who are more regularly xenophobic than any culture perhaps save the Japanese.

Protestant thought instrumental

[ColMstrd]

Max Weber--the father of sociology--attributed the inception of capitalism to the protestant need to do good works on earth for reward in heaven, this being a change from the Roman Catholic cycle of sin, absolution, redemption etc.

His book The protestant ethic and the spirit of capitalism traces the historical antecedents very clearly. Check out Chapter 2 (54k) in particular for an exposition of how maximising business profit became a devout obligation.

Ironically, now we anticipate the Flood (global warming) that is the direct consequence of this sequence of thoughts and behaviours.

United states is "perfectionist"?

[Eric Green]

Hardly! If so, then Wal-Mart and Microsoft would both be bankrupt (both companies are based on the principle that "good enough" junk is what Americans want). If so, then the American "Big Three" automakers would have gone out of business in the 1960's.

The fact of the matter is that what most Americans want is "good enough" junk -- something of low quality, with known flaws, that is inexpensive and "good enough" to get the job done. This is one reason why American industry advances so much faster than, say, German industry. Whereas a German designer will sit there and fiddle and fiddle until the product is "perfect", the American will whip out something servicable, say "Next!", and move on to creating something else using the lessons learned from creating the first. The result is product which is clunky, kludgy, and is "good enough", but which is definitely not going to be held up as anything exempliary. See, e.g., the Intel x86 architecture, which shouts "Kludge!" from every trace on its silicon die.

-E

Re:United states is "perfectionist"?

[MikeBabcock]

Americans (in general) _want_ the best (to drive a BMW / Ferrari / etc., to own a large home, etc.) but are too greedy to pay for it (and end up getting crap).

Thus the cycle continues... everyone trying to better the other while not realising that everyone else is doing the same to them.

It is definately cultural.

"Capitalism" is a Statist Confidence Game

[Baldrson]

If Ambrose Bierce defined "Capitalism", it would have been thusly:

The governmental system of taxing the creation of capital so that the possessors of capital may have less competition for their lofty positions in society and more money for their puppet politicians to spend as they are told.

"Marxism" on the other hand would have run something like:

Capitalism in which the puppet politicians, on behalf of the creators of capital, kill their owners, take their capital and try to occupy their lofty positions in society, only then to find it necessary to kill the creators of capital in order to conceal the fact that the politicans needed someone to pull their strings all along.

There is no real mystery to "capital" -- being simply accumulation of the fruits of labor and enterprise. The only mystery is why warriors, the protectors of such accumumulations, have never realized that they are actually in the insurance business, ignore the politicians, find the best police, soldiers and actuaries and go into business for themselves with something like Warriors Insurance where the wealthy pay insurance premiums for the protection their property rights enjoy from the military and police -- and are indemnified when the military and police fail in their protective duties.

So what about IP?

[code_rage]

A question which has particular applicability for /. readers seems to have gone unasked:

What do Do Soto's '5 mysteries' say about intellectual property and ecommerce?

1. The Mystery of Missing Information. Huge numbers of people live and work off the books: they have no clear title to their land and possessions, they pay no taxes, they have no credit. The unbridled sharing of the creative works of artists might fit here...

5. The Mystery of Legal Failure. In the Roman legal tradition, laws are not created, they are 'discovered'; the best laws are those that fit existing practice. It should surprise no one that RIAA is trying to kill the notion of unpaid music before it gains the patina of respectability.

Re:OK, that ain't slavery.

[KlomDark]

Open your mind a bit, think outside the box your been programmed to think within. If you look at this on a system-wide scale, it IS slavery or at least some kind of coercion. Not like you can leave the planet or suddenly become a 'master'. You might respond to this as "well, these people worked very hard to get where they are". But, a large majority of the 1% are born into huge inheritances, never having to work to have what they have, any more than the other 99% have had to work to become poor. The only way it is acceptable to have a 1% of a society live by simply milking the efforts of the rest of the 99% is in a slavery model. You can call it capitalism, but that's not capitalism, it parasitism - the absolute dark side of the concept of capitalism. 99% of the 1% contribute NOTHING to society, just take from the others like overgrown playground bullies.

You can look at it on a national or global scale, and I realize this is a bit of a new perspective of an ancient concept. It is hard to see without a second point of reference for comparison. To try to grok the concept of taking your mind out of it's secure mold, think of how the culture of what we call "Western Civilization" views other cultures who practice things like clitorectomies of young girls as absolutely barbaric and disgusting. However, after thinking about that concept, then reverse your viewpoint back on our culture and our extremely popular practice of circumcision of young boys. Illogical genital mutilation. And the funny thing is that we who have been circumcised had it done so early in life that we find our mutilated penises normal, and tend to view an uncircumcised penis as abnormal and somewhat disgusting.

Now that I have tried to set the stage for this, consider the following:

It is exactly slavery, maybe even worse, as you aren't even officially Sold, you are never even told you are a slave, most never even begin to realize a hint of it their entire life - it is what you have accepted as secure and 'normal'. You a born into a situation that is very hard to realize due to the lack of perspective of being able to take a look at the monstrous trap 99% of the people are caught in.

I was not meaning to purely prove a point of wage iniquity, but instead to show how the 1% are the slave drivers. Sure, a lot of us in the computer profession are freer and have more liberties than the the average joe trapped in a factory all his life. But that simply makes us nerds favored slaves, nothing more. My point was not about wages, but instead to point out the obviousness of something so hard to realize due to never seeing our global culturism from outside our culture. If you were born with only one eye, you would never be able to fully grasp the concept of depth perception. In fact you would never even think about it unless a two-eye told you about it. And then you might not believe the amount of extra information to be gleaned from two nearly identical images taken merely 2.5 inches apart. If everyone had slugs for hair, nobody would think it was weird.

I do not think this cheapens the word "slavery", instead it deepens and clarifies the meaning. Please don't tell me the only way you can be a slave is by being bought and sold on the public auction block.

Just wonder what it is that you cannot fully see or even notice. I'm sure I only have the slightest inkling of what I am attempting to describe (Maybe why this is coming out a bit vague)

I will end with this statement, and have faith that you can interpolate how it applies to what I have been trying to descibe: Does a fish complain about humidity?

Re:OK, that ain't slavery.

[the eric conspiracy]

But, a large majority of the 1% are born into huge inheritances, never having to work to have what they have, any more than the other 99% have had to work to become poor.

Actually, I don't believe that 1% is the right number - the real super rich are a much smaller percentage. But that is not the point.

The only way it is acceptable to have a 1% of a society live by simply milking the efforts of the rest of the 99% is in a slavery model.

There are many socio-economic models that give rise to this sort of wealth distribution. Just because you don't like the distribution we have (and I think it is a problem too) doesn't mean that it is slavery. Slavery carries many other attributes besides economic disparity.


MOVE 'ZIG'.

Re:Capital is imaginary.

[sjames]

If everyone had a place to live and a place to eat, we'd end up with a whole country that'd look like an inner city project, because people would respect their handout about as much as folks in the projects do...not at all. That'd be real nice, now wouldn't it? And no one could own a really nice, big multi-million dollar home because that'd be "unfair", right?

Unless the problem in the projects is that the residents feel that they don't live there (they just stay there) and they never will. I'll bet if those residents had chosen where they would live, and what the houses would look like, and knew that they OWNED the house, they'd take fine care of it just like most homeowners.

Re:Clean?

[intmainvoid]

American is one of the cleanest countries in the world.

It really helps when you have millions of poor mexicans crossing the border willing to clean for $5/hr.

Re:OK, that ain't slavery.

[TheSync]

But, a large majority of the 1% are born into huge inheritances, never having to work to have what they have, any more than the other 99% have had to work to become poor. ... 99% of the 1% contribute NOTHING to society, just take from the others like overgrown playground bullies.

By investing, rich people can actually create wealth. Now some of that wealth goes back to them (NASDAQ goes up), some of it goes back to workers (jobs and better paying jobs), and some of it goes to consumers (faster computers, cheap televisions, microwave ovens, etc.)

It isn't fair that some people can choose to never have to work. But the truth is that human greed, inflation, and taxes tend to make even the richest do some "work" (careful investment) to create wealth for all kinds of people besides themselves.

Don't put words in my mouth, AC.

[jcr]

I never said that fractional reserve banking doesn't require the use of debt. What I said was that money is not debt. -jcr

True, but ....

[SimonK]

There are also downsides to having the state supply food and housing, which vary depending on how you administer such a scheme, and generally reflect the fact that it would have to be funded from tax receipts.

If the state owns and administers housing stock on behalf of those who would otherwise be homeless, there would be a lack of ownership and care over the houses. The government would not want to pay for nice houses or maintanenace, and the tenants, not owning the capital, would not want to either. This is, in fact, what happens in Britain. Similarly for food. If people go and collect their rations every day with no control over the contents, you are not going to get haute cuisine.

On the other hand, if the state merely agrees to fund individual choices as to where they want to live or what they want to eat, a price limit would have to be agreed. This is essentially like the voucher system used in some places for paying for education. It would work OK, except that the "best" providers of food and housing would price themselves out of the scheme, by refusing to accept voucers at all (stores in Britain do this to assylum seekers who are given tokens in place of cash, and do stores in the US with food stamps), or by raising their prices above what can be payed for with them. The value in many goods comes only from their exclusiveness, and anyway in many cases supply is limited and prices must be raises if demand rises.

So, do away with vouchers and just give people the cash. This is actually pretty close to being a basic income gaurantee - something I think is quite a good idea. The issues then are twofold. Firstly the redistributive nature of the scheme is now clear. Food and housing don't appear from nowhere after all - you're taking resources from one person and giving them to another. Secondly, do you mind that people may not spend their money on what you wanted to give them ? are you going to stop them from investing it in the stock market, losing it, and then having to beg ?