If you think that's bad, you should see how disparagingly the main stream media talks about the US. By the way, the UN does have at least two specific agendas toward achieving world peace and ending poverty. Just because they're not bad doesn't mean they're not agendas.
Of course, most of the US national debt is owed to US citizens, not to international creditors. In fact, a lot of it is owed to the US government. We've been spending the surplus from social security on other programs and issuing ourself "treasury bonds" for future repayment. The whole thing is really quite absurd. At any rate, we'll start repaying that part of the debt in 10-30 years once social security begins paying out more than it takes in. Fun times will be had for all.
Last I checked, Ward Churchill still has not faced any criminal charges. You can bet that if Mel Gibsons father lived in germany, he'd have done some jail-time.
The press might not be the best judge of press freedom. Even if it is, the US is so far toward the top of the list that there's no reason to believe that any of the countries you listed are better.
"The real answer is that no single country should be trusted with control of the Internet and that the UN didn't want to control but to manage the 'net."
Government should be re-active, not pro-active. The current system works very well and there is no reason to try to change it. If the US government gets too overbearing, it will be a simple mater for other countries to fix the problem.
What you're referring to is a negative externality. Part of the governments job is to regulate the economy to prevent negative externalitys (in fact property could not exist without this kind of regulation). I happen to agree with this function of government. But I don't agree with wealth redistribution, or protectionist government government subsidies.
Resources are scarce. They're limited. We do not have unlimited resources. The scarcity of currency reflects this fact.
"An increasingly larger part of the economy is about services, digital goods, information, etc... things which by definition are not scarce, quite the contrary they are infinitely abundant."
Wrong. All of these services are made possible by people working. Unfortunately, people cannot work more than 24 hours a day, so these resources are limited (scarce).
"it's showing no sign of improvement, quite the contrary." That's funny, most of those statistics made statements about the current state of affairs, and did not compare the plight of the poor today to their plight in the past. There were statistics that said the rich today are comparatively more rich than the rich in the past. One talked about how the progress made in Africa has been slowing. Certainly nothing noted a reverse trend. There was one thing I noticed, however. All of the wealthiest countries had the least restrictive trade laws, and all of the poorest countries had the most restrictive trade laws, funny how that works. And what's more, the countries with less regulated economies were more wealthy. I wonder what that means.
Also, I think it's funny when people say that the world produces enough food for all it's people, and yet many go hungry. Less restrictive trade laws would help this problem because it would allow producers in countries with too much food to sell to people in the countries with too little food. And yet, people say that free trade perpetuates the problem of poverty.
"France has the highest per-worker productivity rate in the world, with a 10% unemployment rate which has been remaining constant for 3 decades now."
I wasn't aware that France has the highest per-worker productivity rate in the world, the US has the highest GDP per capita though. Perhaps it's because they don't count the unemployed in per-worker productivity (because they're not workers). At any rate the US probably has a lower unemployment rate than France because it is harder to be unemployed (and live) in the US. I think you'd see their unemployment rate come down if they cut some of their social programs. I can't really say whether this would be a good thing or a bad thing (it's kind of a value judgment).
"Except there is no correllation between productivity and employment. "
I don't know why you'd expect one. At least there isn't a negative correlation between productivity and employment.
"The myth that the market self-equilibrates to an ideal position is proven wrong every day"
Quite right. The thing is that the market self-equilibrates to a good position, one that is better than any kind of planned economy has been capable of. That means that it's the best system.
"even though proponents of the free market keep claiming that the reason is because governments interfere and that the markets should be even less regulated"
Government interference can have a negative effect on the market efficiency, and you'd be stupid to think that it cant. But, the market can't exist without government regulation. It's a tenuous balance which must be carefully maintained. Any changes to the (well-working) economic system must be carefully considered and slowly introduced to ensure stability, and positive results. This includes deregulation. I personally believe that less government regulation is the way to go, but I'm not some waco-nutjob claiming that we should end environmental regulation and get rid of the IRS.
"Then explain how come half of the world is starving, even though we already do produce enough food to feed everybody ?"
Well, at least we now produce enough food to feed the whole world (this is an improvement that would not be possible without capitalism and free-trade). Now we just need to figure out a way to get the food to everybody. Capitalism worked for the first half of the equation, and it can and will work for the second half. Of course, once everybody has food, everyone will still need education, health-care, and entertainment, but it's a start (there will always be more things that people "need" this is why resources are scarce).
"Yes, but overall you still have a situation where people are competing over a resource which is scarce by design, so some are bound to lose."
Well, resources are scarce, so you'd hope that money (which is supposed to represent resources) would also be scarce. Yes, some are bound to loose, it doesn't really matter what system you use. The important thing is that fewer people loose under capitalism.
"BTW in case you haven't noticed, I'm not talking specifically about the fed reserve or anything else local to the US" I'm not either, it's just easier to use local terminology. All governments that regulate capitalist economies use some form of monetary polity to control the money supply.
"And the Fed (or any government) can't bail people out except as an exceptional measure," The government of the united states bails people out all the time, using bankruptcy protection.
"Right, and that there are more skilled workers doesn't diminish their market value at all."
Supposedly, skilled workers are more productive than unskilled ones (this is why they get paid more, and are called skilled). This will continue to be true no matter what their numbers, and relative market value are. As the number of skilled workers increase, overall productivity will increase. With more resources being produced, fewer people will go without resources, and more need will be met in general.
"There is nothing inherently fair or efficient about "free market"."
You are wrong. In a free market, exchanges take place only when both parties agree to the exchange. Because both parties agreed to the exchange, they are likely to view the exchange as having been fair. The only notable exceptions are when people feel that they have been coerced into an making an exchange.
A free market also promotes efficiency because economic activity takes place (usually) when the involved parties perceive an increase in value for themselves as a result of the exchange (this means that the resources are being moved from where they are not needed, to where they are needed). Furthermore, it promotes efficiency by allowing individuals who produce more than they consume to acquire wealth, which which in turn gives them the ability to produce even more resources. The end result is that more of societies needs are met.
"For example, transferring vast wealth to offspring who had not earned it is a feudal, not capitalist, activity."
Is transferring wealth to your offspring a free exchange? Yes. Does it fit the definition of happening in a free market? Yes. Is it a capitalist activity? Yes. It may be feudal, but it is still capitalist. Simply because you don't find any value for the parent (or for society as a whole) in such an exchange doesn't mean there is none. I don't know why you have such a problem with giving things to your offspring. It's human nature for people to want their offspring to succeed and excel, so giving resources to them comes naturally.
"No. As I have repeteadely demonstrated, the simplistic system of capitalism breaks down in a number of obvious circumstances."
No it doesn't, there are simply difficulties in accounting. Economists call these negative externalitys. Sometimes exchanges of value can happen without the knowing consent of all (or even any) of the participants. Probably the best example is environmental degradation, which can generate value for some at the expense of others. Government regulation is necessary to prevent negative externalitys.
"To some things the market does not apply at all and yet some greed-monkeys are trying hard to apply it there (like the "Intellectual Property" and related scams)."
I'm not sure you understand what property is. People do not have an inherent right to property. There is no magical force of nature that says "these resources are yours and no one else can have them". In the absence of government, people would have to defend "their" resources themselves. What we have done is made an agreement that people can have control over certain resources. This agreement allows the existence of property, and by extension allows the existence of the free market. The reasoning is that if we acknowledge and respect other peoples property, and they respect ours, we will all spend less time fighting over resources and more time being productive. In the absence of property, the free market would not apply to anything. Would you call property a scam?
"financial scam . . . operatives"
If a party misrepresents what the other will receive in an exchange, it is not a fair exchange. Cohesion is, and should be, illegal.
"inheritance, lottery winning etc and so on."
I think I've heard this argument before. I don't see how they are examples of the free market system not working. The lottery is a form of entertainment, and as such it provides value. It wouldn't be fun if no-one ever won.
"Conceding?"
I see you've noticed that I use a spell checker. I have noticed that you do not. You shouldn't be to smug about amazing mastery of the english language. It's a lot easier see errors in what someone else has typed.
"assuming that it is I who takes you seriously and who has to strive for your approval"
I didn't say that I thought you take me seriously. But I'm sure that as a consultant, you may be interested in someone taking you seriously. You may still want to listen to my advice.
I think inefficiency of government is inversely related to number of people being governed. The US has almost 300 million citizens, while the largest country in europe is less than half that size. So to some extent, you should expect european governments to be more efficient. Then, if you look at the EU, or the UN, you can see where the inefficiency really starts to come into play. When the group of people being governed is diverse, reaching agreements is hard. Because the US is much more diverse than any one country in the EU, you would expect much less effective governance (at the federal level) and this is the case. The best solution is leaving more power in the hands of local government, and giving less power to the federal government. Beyond that, you want to leave as little to the government as possible, to allow for as much personal freedom as possible, as well as to promote efficiency.
The thing is that the government isn't particularly good at doing anything, and that includes making long-term investments. The problem is that since we don't use a totalitarian system, the governments functions slowly, and even if a long-term program gets started it usually won't been seen through to completion. What's worse, due to the lack of competition, government institutions become less efficient over time as excessive layers of bureaucracy and management build up. In private industry, companies will go bankrupt, or reorganize once they are no longer competetive. This is the reason most major technological advances (outside the military) are made in private industry despite the governments huge investments in R&D. There isn't really a (good) way to solve this problem using the government. You could cut the budgets to NASA and the NSF to zero, and rebuild them from scratch, but they'd be back to their bloated and inefficient selves in short order.
I think the best plan (as far as R&D goes) would be better intellectual property laws, so that people can recoup on long-term investments without keeping their discoveries secret.
I don't know how you've come to the conclusion that capitalism is a rotten solution. It is efficient, it allows economic decisions to be made on an individual basis by the population at large, and it allows a degree of personal freedom for members of society that is unprecedented when compared to that allowed by other historical or contemporary forms of government.
Capitalism works because people can spend money how they choose. The idea is that maximizing the value to oneself in every voluntary exchange, society as a whole becomes enriched. I think your problem may be that you assume yourself so intelligent that you can make value judgments for other people better than they can for themselves. This is simply not true. Even if you knew enough to be able to maximize the value to others (as you see it) you would be incapable of doing a better job because you judge values by a different standard than other people. So when you decide that these heirs are undeserving of their parents fortune, you must understand that it is a value judgment that the parent must make. Simply put, it is not your money and you have no reason to believe that you know how to spend it better than they do.
You can take heart, though, that if they spend the money frivolously they will loose it in short order. However, if the fortune grows under their stewardship, you can only conclude that it was well spent. This lends credence to their parents assertion that they were deserving of the money.
You should know that when I was talking about convincing people to give you money for nothing, I was not referring to racketeering. Conning people out of money is illegal and immoral, and as such does not fit my description. What I was referring to was charitable donations, or allowances, or gifts that people give each other without expecting a return. And yes, it is hard to convince someone that you, or your cause is worthy of such a gift.
I am not a free-market nut-job, and I am not greedy. I believe that government is essential for enforcing laws and protecting the citizenry. But I also believe that it's direct role in the economy should be minimal as it is not as fair or efficient as the free-market. I definitely don't agree with "wealth redistribution" because it I have found that wealth is difficult to acquire, and it strikes me as particularly unfair to take if from someone who has earned it and give it to someone who hasn't.
I am tired of being called stupid, greedy, and immoral by someone who doesn't even know me. Your conceding and insulting tone makes a well-reasond discussion of the merits of capitalism difficult. You should refrain from using this kind of language in the future if you want to be taken seriously.
"That doesn't change the fact that since more money is due than the existing amount, some people are bound to go bankrupt, therefore our currency system implies poverty."
No. It simply means that economic growth is assumed. This itself is not even necessary true, because only nominal economic growth is assumed. Since the fed usually loans money below the inflation rate, real economic growth does not need to occur. Secondly, the fed is a rather forgiving lender, and assuming one of the institutions they lend to is in danger of going bankrupt (I've never herd of this happening) you can bet the federal government will bail them out (you know, FDIC ensured and all). Basically, as long as the federal government keeps loaning out more money every year, it will make up for the interest rate due on the money. You need to take an economics course.
" If you don't have cheap labor, a lot of goods would be more expensive" Yes, but since everyone is skilled, they make more money, so everyone can afford more in the end. Think if it this way, everyone is more productive, so there's more stuff to go around. You've got to think of the big picture to understand what I'm talking about.
I have never said that capitalism worked perfectly all of the time. What I have said is that capitalism works well enough that it is the best system. Things do not have to be perfect (nothing is perfect) to work well. There is no system that solves the economic problem better than capitalism.
"Paris Hilton? Helen, Alice, Jim, John and Rob Walton" The mere fact that you see no value in an individuals line of work does not mean that none exists. Convincing people to give you money is not easy to do. It is extremely hard to do if you will provide no benefit for that money, and you do not break the law.
There is nothing wrong with leaving money to your children. The wealth you accumulate during your life represents the positive contributions you've made to society during the course of that life, and the rest of society owes you a debt of gratitude. The wealth is yours to spend how you please and to leave to whoever you wish. This is the fundamental nature of economic freedom.
I am well aware of this. The thing is that it doesn't matter because only the person or institution that takes out the loan is obligated to pay it back. You don't have to take out a loan to convince someone to give you money.
"... and there goes the economy"
This is basically a restatement of the anti-industrialist mantra. If jobs are made obsolete, there will be no more jobs, and everyone will die. This is simply not true. People as a whole become more productive as a result of automation, this improves the economy.
"Complementary currencies help making unskilled people less poor" Wouldn't that perpetuate the problem of unskilled labour by making it easer to be unskilled?
Right, it's not something you spend money on now to make a return later. Clearly.
"major labels no longer take the time to nurture talents in hope they will have a great career in 5 or 10 years" Yeah right, the music labels have always been interested in making a quick buck. There are no more one-hit wonders today than there were in the '50s.
"the current (rather recent) implementation in which companies are required by the stock market to keep 2-digits profitability is broken, even some hard-core capitalists are sounding the alarm bell about this."
Okay, but that doesn't have anything to do with anything I've been saying. Of course it's bad to be short sited. This is obvious.
"Money is created by bank loans, which are paid back with interests."
It doesn't matter because you do not have to take out a loan to make money. If you work a job, and your employer pays you a wage, you are not obligated to pay it back.
"because automation would be more expensive"
What that means is that without an unskilled labour force, things would be more expensive (relatively speaking) for people who are not members of the working class. This makes sense because there would be no working class, and society as a whole would be more egalitarian (there would be less really poor people).
"Without these unskilled workers, we wouldn't have cheap clothes, cheap hi-tech gear, or clean offices."
No, we wouldn't have cheap clothes, true, but we would still have clothes. We would definitely still have high-teck gear (it would also be more expensive). We would have to clean our offices ourselves (ooh, scary). The difference would be that there would be greater access to "cheap" products in general because there would be fewer poor people who can't afford them.
"They very much can, as their current and past use have demonstrated." Okay, care to justify that? The wikipedia article didn't really say how effective they were. How can complimentary currencies eliminate unskilled labour? If anything they perpetuate it by paying unskilled laborers more.
Using a currency like ours does not in any way induce a slave like lower class. In reality, the US economy could exist without any unskilled labour at all. Only the existence of non-skilled laborers is perpetuating those kind of jobs (because automation would be more expensive). The problem is that unskilled labour is obsolete. Complementary currencies can do nothing to change this.
Increased use does not imply a large market share. Even if the usage of complimentary currency increased ten-ford, it would still be used much less than normal currency (like legal tender). Your statement is meaningless in this context.
I have never had experiences demonstrate that capitalist systems work less well than any other system. History shows that capitalist economic systems are the most efficient of any that have been implemented.
Private industries make long term investments all the time. How do you think 30-year mortgages are granted, or chemical plants with 20-year repayment schedules are built? Most government programs are not that long-lived.
Money represents resources. Earning money means that you're generating resources, spending money means that you're expending resources. The first assumption economists make is that resources are limited. The second one is that demand for those resources is, for all practical purposes, unlimited. This means that we cannot simply disperse resources in such a way that all of societies demand (or need if you prefer) is met. These two assumptions lead to the economic problem: how do you allocate limited resources in the face of (virtually) unlimited need? The idea behind capitalism is that allocating more resources to individuals who are more productive will increase the productivity of society as a whole. This means that the available resources will increase and more demand will be met.
You like to cite hypothetical examples where using currency to value an individuals contribution does not work well. A few hypothetical examples is not proof that the system does not work well. In reality, one is hard pressed to find real examples of wealthy people who do not contribute positively to society. In the cases you can find, the actions undertaken by the individuals in question to acquire wealth is usually illegal.
The market crises itself was relatively minor. Market "adjustments" occur all the time, and are not always accompanied by a severe depression. In the case of the great depression, the propensity to save money (especially by hoarding it rather than saving it in banks) is what made it significant. I never claimed that saving was the cause, only that it was what made it exceptional.
By definition, money spent by the government is not spent in the private sector. This is because the government is not part of the private sector.
That means that the government does not have to be efficient, may not have to comply with regulations, and is not always accountable for any mistakes it makes. On the other hand, private businesses must be efficient in order to remain competitive, are required by law to comply with regulation, and are civilly(but not always criminally thanks to limited liability corporations) liable for for their actions.
"Government spending can enable private spending."
I don't see your point. Obviously, the best currency to use for comparing value is the one which is the most broadly and frequently used when buying/selling items. This being true, complimentary currency would rarely be the best currency to use when judging value.
I think that as Apple continues to build a brand name for themselves associating Apple with high quality products, this will become a real possibility. Especially as they move into the consumer electronics business were people are willing to pay more for better quality.
First of all, currency is the best measure of value. There is no better measure of value than currency. Since this is true, the amount of currency one controls is then the best measure of their value to society.
"In a capitalist system, resources are allocated to people depending on their ability to accumulate them"
No, you do not have to accumulate resources to accumulate wealth. This is one of the functions of currency. Currency represents resources.
"In its extreme form, it was called National Socialism (a misnomer if there ever was one) whereby weak, disabled, mentally ill and all other "worthless to Arian society" individuals (such as gays, Jews and Gypsies) were simply exterminated."
This is not what I believe. I would never propose the extermination of specifically selected individuals. I believe that in society, everyone should have a fair chance at producing enough resources to provide for themselves. I believe that it is the job of the government only to ensure the fairness and reliability of the economic system that makes this possible. Like I said before, if you want to help those people I have no problem with that. I don't think it's good to force people into a situation where they must help other people (it encourages mooching).
"Really? What if the fool has his fortune invested by his parents and is not foolish enough to squander it faster then it grows?"
This is a fundamental misunderstanding of the nature of currency. Only spending money represents an expenditure of resources. If the millionaire holds onto it, he is not wasting societies resources. Moreover he is providing a value to society, since he is providing investment capitol to boost the productivity of others. If he spends more value than he is generating (by making bad investments or buying too many hookers) his wealth will disappear.
"Excessive accumulation of wealth was also one of the leading causes of the 1929 market crash and the following Great Depression as lack of competition, combined with an ability to profit endlessly out of monopolization of certain market segments lead to cash starvation of consumers, which quickly resulted in the whole phony house of cards falling in onto itself."
No, the problem is that people had less wealth than they thought they did (because of the stock market). Once this became clear, people stopped investing and began saving. This was what lead to the great depression.
Slashdot Mirror
If you think that's bad, you should see how disparagingly the main stream media talks about the US. By the way, the UN does have at least two specific agendas toward achieving world peace and ending poverty. Just because they're not bad doesn't mean they're not agendas.
Of course, most of the US national debt is owed to US citizens, not to international creditors. In fact, a lot of it is owed to the US government. We've been spending the surplus from social security on other programs and issuing ourself "treasury bonds" for future repayment. The whole thing is really quite absurd. At any rate, we'll start repaying that part of the debt in 10-30 years once social security begins paying out more than it takes in. Fun times will be had for all.
Last I checked, Ward Churchill still has not faced any criminal charges. You can bet that if Mel Gibsons father lived in germany, he'd have done some jail-time.
The press might not be the best judge of press freedom. Even if it is, the US is so far toward the top of the list that there's no reason to believe that any of the countries you listed are better.
"The real answer is that no single country should be trusted with control of the Internet and that the UN didn't want to control but to manage the 'net."
Government should be re-active, not pro-active. The current system works very well and there is no reason to try to change it. If the US government gets too overbearing, it will be a simple mater for other countries to fix the problem.
The US to gets to do things, and the UN gets to talk about doing things. Each ends up doing what it is best at. This is a win-win situation.
He means that you can't freely discuss nazi history in Germany or France. One could hardly call that freedom of speech.
What you're referring to is a negative externality. Part of the governments job is to regulate the economy to prevent negative externalitys (in fact property could not exist without this kind of regulation). I happen to agree with this function of government. But I don't agree with wealth redistribution, or protectionist government government subsidies.
Resources are scarce. They're limited. We do not have unlimited resources. The scarcity of currency reflects this fact.
"An increasingly larger part of the economy is about services, digital goods, information, etc... things which by definition are not scarce, quite the contrary they are infinitely abundant."
Wrong. All of these services are made possible by people working. Unfortunately, people cannot work more than 24 hours a day, so these resources are limited (scarce).
"it's showing no sign of improvement, quite the contrary." That's funny, most of those statistics made statements about the current state of affairs, and did not compare the plight of the poor today to their plight in the past. There were statistics that said the rich today are comparatively more rich than the rich in the past. One talked about how the progress made in Africa has been slowing. Certainly nothing noted a reverse trend. There was one thing I noticed, however. All of the wealthiest countries had the least restrictive trade laws, and all of the poorest countries had the most restrictive trade laws, funny how that works. And what's more, the countries with less regulated economies were more wealthy. I wonder what that means.
Also, I think it's funny when people say that the world produces enough food for all it's people, and yet many go hungry. Less restrictive trade laws would help this problem because it would allow producers in countries with too much food to sell to people in the countries with too little food. And yet, people say that free trade perpetuates the problem of poverty.
"France has the highest per-worker productivity rate in the world, with a 10% unemployment rate which has been remaining constant for 3 decades now."
I wasn't aware that France has the highest per-worker productivity rate in the world, the US has the highest GDP per capita though. Perhaps it's because they don't count the unemployed in per-worker productivity (because they're not workers). At any rate the US probably has a lower unemployment rate than France because it is harder to be unemployed (and live) in the US. I think you'd see their unemployment rate come down if they cut some of their social programs. I can't really say whether this would be a good thing or a bad thing (it's kind of a value judgment).
"Except there is no correllation between productivity and employment. "
I don't know why you'd expect one. At least there isn't a negative correlation between productivity and employment.
"The myth that the market self-equilibrates to an ideal position is proven wrong every day"
Quite right. The thing is that the market self-equilibrates to a good position, one that is better than any kind of planned economy has been capable of. That means that it's the best system.
"even though proponents of the free market keep claiming that the reason is because governments interfere and that the markets should be even less regulated"
Government interference can have a negative effect on the market efficiency, and you'd be stupid to think that it cant. But, the market can't exist without government regulation. It's a tenuous balance which must be carefully maintained. Any changes to the (well-working) economic system must be carefully considered and slowly introduced to ensure stability, and positive results. This includes deregulation. I personally believe that less government regulation is the way to go, but I'm not some waco-nutjob claiming that we should end environmental regulation and get rid of the IRS.
"Then explain how come half of the world is starving, even though we already do produce enough food to feed everybody ?"
Well, at least we now produce enough food to feed the whole world (this is an improvement that would not be possible without capitalism and free-trade). Now we just need to figure out a way to get the food to everybody. Capitalism worked for the first half of the equation, and it can and will work for the second half. Of course, once everybody has food, everyone will still need education, health-care, and entertainment, but it's a start (there will always be more things that people "need" this is why resources are scarce).
"Yes, but overall you still have a situation where people are competing over a resource which is scarce by design, so some are bound to lose."
Well, resources are scarce, so you'd hope that money (which is supposed to represent resources) would also be scarce. Yes, some are bound to loose, it doesn't really matter what system you use. The important thing is that fewer people loose under capitalism.
"BTW in case you haven't noticed, I'm not talking specifically about the fed reserve or anything else local to the US" I'm not either, it's just easier to use local terminology. All governments that regulate capitalist economies use some form of monetary polity to control the money supply.
"And the Fed (or any government) can't bail people out except as an exceptional measure," The government of the united states bails people out all the time, using bankruptcy protection.
"Right, and that there are more skilled workers doesn't diminish their market value at all."
Supposedly, skilled workers are more productive than unskilled ones (this is why they get paid more, and are called skilled). This will continue to be true no matter what their numbers, and relative market value are. As the number of skilled workers increase, overall productivity will increase. With more resources being produced, fewer people will go without resources, and more need will be met in general.
"There is nothing inherently fair or efficient about "free market"."
You are wrong. In a free market, exchanges take place only when both parties agree to the exchange. Because both parties agreed to the exchange, they are likely to view the exchange as having been fair. The only notable exceptions are when people feel that they have been coerced into an making an exchange.
A free market also promotes efficiency because economic activity takes place (usually) when the involved parties perceive an increase in value for themselves as a result of the exchange (this means that the resources are being moved from where they are not needed, to where they are needed). Furthermore, it promotes efficiency by allowing individuals who produce more than they consume to acquire wealth, which which in turn gives them the ability to produce even more resources. The end result is that more of societies needs are met.
"For example, transferring vast wealth to offspring who had not earned it is a feudal, not capitalist, activity."
Is transferring wealth to your offspring a free exchange? Yes. Does it fit the definition of happening in a free market? Yes. Is it a capitalist activity? Yes. It may be feudal, but it is still capitalist. Simply because you don't find any value for the parent (or for society as a whole) in such an exchange doesn't mean there is none. I don't know why you have such a problem with giving things to your offspring. It's human nature for people to want their offspring to succeed and excel, so giving resources to them comes naturally.
"No. As I have repeteadely demonstrated, the simplistic system of capitalism breaks down in a number of obvious circumstances."
No it doesn't, there are simply difficulties in accounting. Economists call these negative externalitys. Sometimes exchanges of value can happen without the knowing consent of all (or even any) of the participants. Probably the best example is environmental degradation, which can generate value for some at the expense of others. Government regulation is necessary to prevent negative externalitys.
"To some things the market does not apply at all and yet some greed-monkeys are trying hard to apply it there (like the "Intellectual Property" and related scams)."
I'm not sure you understand what property is. People do not have an inherent right to property. There is no magical force of nature that says "these resources are yours and no one else can have them". In the absence of government, people would have to defend "their" resources themselves. What we have done is made an agreement that people can have control over certain resources. This agreement allows the existence of property, and by extension allows the existence of the free market. The reasoning is that if we acknowledge and respect other peoples property, and they respect ours, we will all spend less time fighting over resources and more time being productive. In the absence of property, the free market would not apply to anything. Would you call property a scam?
"financial scam . . . operatives"
If a party misrepresents what the other will receive in an exchange, it is not a fair exchange. Cohesion is, and should be, illegal.
"inheritance, lottery winning etc and so on."
I think I've heard this argument before. I don't see how they are examples of the free market system not working. The lottery is a form of entertainment, and as such it provides value. It wouldn't be fun if no-one ever won.
"Conceding?"
I see you've noticed that I use a spell checker. I have noticed that you do not. You shouldn't be to smug about amazing mastery of the english language. It's a lot easier see errors in what someone else has typed.
"assuming that it is I who takes you seriously and who has to strive for your approval"
I didn't say that I thought you take me seriously. But I'm sure that as a consultant, you may be interested in someone taking you seriously. You may still want to listen to my advice.
I think inefficiency of government is inversely related to number of people being governed. The US has almost 300 million citizens, while the largest country in europe is less than half that size. So to some extent, you should expect european governments to be more efficient. Then, if you look at the EU, or the UN, you can see where the inefficiency really starts to come into play. When the group of people being governed is diverse, reaching agreements is hard. Because the US is much more diverse than any one country in the EU, you would expect much less effective governance (at the federal level) and this is the case. The best solution is leaving more power in the hands of local government, and giving less power to the federal government. Beyond that, you want to leave as little to the government as possible, to allow for as much personal freedom as possible, as well as to promote efficiency.
The thing is that the government isn't particularly good at doing anything, and that includes making long-term investments. The problem is that since we don't use a totalitarian system, the governments functions slowly, and even if a long-term program gets started it usually won't been seen through to completion. What's worse, due to the lack of competition, government institutions become less efficient over time as excessive layers of bureaucracy and management build up. In private industry, companies will go bankrupt, or reorganize once they are no longer competetive. This is the reason most major technological advances (outside the military) are made in private industry despite the governments huge investments in R&D. There isn't really a (good) way to solve this problem using the government. You could cut the budgets to NASA and the NSF to zero, and rebuild them from scratch, but they'd be back to their bloated and inefficient selves in short order.
I think the best plan (as far as R&D goes) would be better intellectual property laws, so that people can recoup on long-term investments without keeping their discoveries secret.
I don't know how you've come to the conclusion that capitalism is a rotten solution. It is efficient, it allows economic decisions to be made on an individual basis by the population at large, and it allows a degree of personal freedom for members of society that is unprecedented when compared to that allowed by other historical or contemporary forms of government.
Capitalism works because people can spend money how they choose. The idea is that maximizing the value to oneself in every voluntary exchange, society as a whole becomes enriched. I think your problem may be that you assume yourself so intelligent that you can make value judgments for other people better than they can for themselves. This is simply not true. Even if you knew enough to be able to maximize the value to others (as you see it) you would be incapable of doing a better job because you judge values by a different standard than other people. So when you decide that these heirs are undeserving of their parents fortune, you must understand that it is a value judgment that the parent must make. Simply put, it is not your money and you have no reason to believe that you know how to spend it better than they do.
You can take heart, though, that if they spend the money frivolously they will loose it in short order. However, if the fortune grows under their stewardship, you can only conclude that it was well spent. This lends credence to their parents assertion that they were deserving of the money.
You should know that when I was talking about convincing people to give you money for nothing, I was not referring to racketeering. Conning people out of money is illegal and immoral, and as such does not fit my description. What I was referring to was charitable donations, or allowances, or gifts that people give each other without expecting a return. And yes, it is hard to convince someone that you, or your cause is worthy of such a gift.
I am not a free-market nut-job, and I am not greedy. I believe that government is essential for enforcing laws and protecting the citizenry. But I also believe that it's direct role in the economy should be minimal as it is not as fair or efficient as the free-market. I definitely don't agree with "wealth redistribution" because it I have found that wealth is difficult to acquire, and it strikes me as particularly unfair to take if from someone who has earned it and give it to someone who hasn't.
I am tired of being called stupid, greedy, and immoral by someone who doesn't even know me. Your conceding and insulting tone makes a well-reasond discussion of the merits of capitalism difficult. You should refrain from using this kind of language in the future if you want to be taken seriously.
"That doesn't change the fact that since more money is due than the existing amount, some people are bound to go bankrupt, therefore our currency system implies poverty."
No. It simply means that economic growth is assumed. This itself is not even necessary true, because only nominal economic growth is assumed. Since the fed usually loans money below the inflation rate, real economic growth does not need to occur. Secondly, the fed is a rather forgiving lender, and assuming one of the institutions they lend to is in danger of going bankrupt (I've never herd of this happening) you can bet the federal government will bail them out (you know, FDIC ensured and all). Basically, as long as the federal government keeps loaning out more money every year, it will make up for the interest rate due on the money. You need to take an economics course.
" If you don't have cheap labor, a lot of goods would be more expensive" Yes, but since everyone is skilled, they make more money, so everyone can afford more in the end. Think if it this way, everyone is more productive, so there's more stuff to go around. You've got to think of the big picture to understand what I'm talking about.
I have never said that capitalism worked perfectly all of the time. What I have said is that capitalism works well enough that it is the best system. Things do not have to be perfect (nothing is perfect) to work well. There is no system that solves the economic problem better than capitalism.
"Paris Hilton? Helen, Alice, Jim, John and Rob Walton" The mere fact that you see no value in an individuals line of work does not mean that none exists. Convincing people to give you money is not easy to do. It is extremely hard to do if you will provide no benefit for that money, and you do not break the law.
There is nothing wrong with leaving money to your children. The wealth you accumulate during your life represents the positive contributions you've made to society during the course of that life, and the rest of society owes you a debt of gratitude. The wealth is yours to spend how you please and to leave to whoever you wish. This is the fundamental nature of economic freedom.
"ALL money is created by bank loan"
I am well aware of this. The thing is that it doesn't matter because only the person or institution that takes out the loan is obligated to pay it back. You don't have to take out a loan to convince someone to give you money.
"... and there goes the economy"
This is basically a restatement of the anti-industrialist mantra. If jobs are made obsolete, there will be no more jobs, and everyone will die. This is simply not true. People as a whole become more productive as a result of automation, this improves the economy.
"Complementary currencies help making unskilled people less poor" Wouldn't that perpetuate the problem of unskilled labour by making it easer to be unskilled?
"Er, a mortgage or a loan is not an investment"
Right, it's not something you spend money on now to make a return later. Clearly.
"major labels no longer take the time to nurture talents in hope they will have a great career in 5 or 10 years" Yeah right, the music labels have always been interested in making a quick buck. There are no more one-hit wonders today than there were in the '50s.
"the current (rather recent) implementation in which companies are required by the stock market to keep 2-digits profitability is broken, even some hard-core capitalists are sounding the alarm bell about this."
Okay, but that doesn't have anything to do with anything I've been saying. Of course it's bad to be short sited. This is obvious.
"Money is created by bank loans, which are paid back with interests."
It doesn't matter because you do not have to take out a loan to make money. If you work a job, and your employer pays you a wage, you are not obligated to pay it back.
"because automation would be more expensive"
What that means is that without an unskilled labour force, things would be more expensive (relatively speaking) for people who are not members of the working class. This makes sense because there would be no working class, and society as a whole would be more egalitarian (there would be less really poor people).
"Without these unskilled workers, we wouldn't have cheap clothes, cheap hi-tech gear, or clean offices."
No, we wouldn't have cheap clothes, true, but we would still have clothes. We would definitely still have high-teck gear (it would also be more expensive). We would have to clean our offices ourselves (ooh, scary). The difference would be that there would be greater access to "cheap" products in general because there would be fewer poor people who can't afford them.
"They very much can, as their current and past use have demonstrated." Okay, care to justify that? The wikipedia article didn't really say how effective they were. How can complimentary currencies eliminate unskilled labour? If anything they perpetuate it by paying unskilled laborers more.
Using a currency like ours does not in any way induce a slave like lower class. In reality, the US economy could exist without any unskilled labour at all. Only the existence of non-skilled laborers is perpetuating those kind of jobs (because automation would be more expensive). The problem is that unskilled labour is obsolete. Complementary currencies can do nothing to change this.
Increased use does not imply a large market share. Even if the usage of complimentary currency increased ten-ford, it would still be used much less than normal currency (like legal tender). Your statement is meaningless in this context.
I have never had experiences demonstrate that capitalist systems work less well than any other system. History shows that capitalist economic systems are the most efficient of any that have been implemented.
Private industries make long term investments all the time. How do you think 30-year mortgages are granted, or chemical plants with 20-year repayment schedules are built? Most government programs are not that long-lived.
Money represents resources. Earning money means that you're generating resources, spending money means that you're expending resources. The first assumption economists make is that resources are limited. The second one is that demand for those resources is, for all practical purposes, unlimited. This means that we cannot simply disperse resources in such a way that all of societies demand (or need if you prefer) is met. These two assumptions lead to the economic problem: how do you allocate limited resources in the face of (virtually) unlimited need? The idea behind capitalism is that allocating more resources to individuals who are more productive will increase the productivity of society as a whole. This means that the available resources will increase and more demand will be met.
You like to cite hypothetical examples where using currency to value an individuals contribution does not work well. A few hypothetical examples is not proof that the system does not work well. In reality, one is hard pressed to find real examples of wealthy people who do not contribute positively to society. In the cases you can find, the actions undertaken by the individuals in question to acquire wealth is usually illegal.
The market crises itself was relatively minor. Market "adjustments" occur all the time, and are not always accompanied by a severe depression. In the case of the great depression, the propensity to save money (especially by hoarding it rather than saving it in banks) is what made it significant. I never claimed that saving was the cause, only that it was what made it exceptional.
By definition, money spent by the government is not spent in the private sector. This is because the government is not part of the private sector.
That means that the government does not have to be efficient, may not have to comply with regulations, and is not always accountable for any mistakes it makes. On the other hand, private businesses must be efficient in order to remain competitive, are required by law to comply with regulation, and are civilly(but not always criminally thanks to limited liability corporations) liable for for their actions.
"Government spending can enable private spending."
True, but it can also inhibit it.
I don't see your point. Obviously, the best currency to use for comparing value is the one which is the most broadly and frequently used when buying/selling items. This being true, complimentary currency would rarely be the best currency to use when judging value.
I think that as Apple continues to build a brand name for themselves associating Apple with high quality products, this will become a real possibility. Especially as they move into the consumer electronics business were people are willing to pay more for better quality.
First of all, currency is the best measure of value. There is no better measure of value than currency. Since this is true, the amount of currency one controls is then the best measure of their value to society.
"In a capitalist system, resources are allocated to people depending on their ability to accumulate them"
No, you do not have to accumulate resources to accumulate wealth. This is one of the functions of currency. Currency represents resources.
"In its extreme form, it was called National Socialism (a misnomer if there ever was one) whereby weak, disabled, mentally ill and all other "worthless to Arian society" individuals (such as gays, Jews and Gypsies) were simply exterminated."
This is not what I believe. I would never propose the extermination of specifically selected individuals. I believe that in society, everyone should have a fair chance at producing enough resources to provide for themselves. I believe that it is the job of the government only to ensure the fairness and reliability of the economic system that makes this possible. Like I said before, if you want to help those people I have no problem with that. I don't think it's good to force people into a situation where they must help other people (it encourages mooching).
"Really? What if the fool has his fortune invested by his parents and is not foolish enough to squander it faster then it grows?"
This is a fundamental misunderstanding of the nature of currency. Only spending money represents an expenditure of resources. If the millionaire holds onto it, he is not wasting societies resources. Moreover he is providing a value to society, since he is providing investment capitol to boost the productivity of others. If he spends more value than he is generating (by making bad investments or buying too many hookers) his wealth will disappear.
"Excessive accumulation of wealth was also one of the leading causes of the 1929 market crash and the following Great Depression as lack of competition, combined with an ability to profit endlessly out of monopolization of certain market segments lead to cash starvation of consumers, which quickly resulted in the whole phony house of cards falling in onto itself."
No, the problem is that people had less wealth than they thought they did (because of the stock market). Once this became clear, people stopped investing and began saving. This was what lead to the great depression.