The purpose of this post is to ask you the question is capitalism good or bad? I am curious myself of the answers that are floating around the collective unconsciousness. Does capitalism work is a very relevant question. After studying economics and living in the USA and a post socialist country I have an opinion but I want to look at it from both sides and hear what you think.
Today in the USA and Europe, the economy is doing nothing special and politically we are tending towards a social state. This question is important for the elections in the USA in 2010. However, it is also important for you personally because how you answer this question determines your life and your future. I have a poll set up and invite your comments. Please take the time to vote.
At the end of this post you can read what I think about capitalism, it if is wrong or the best system. I tried to give a balanced argument but it is clear what I think .
Loading ...Is capitalism bad?
The main argument that says capitalism is bad goes like this: people need to be controlled or the greedy and the powerful will use the good hard-working people of the earth and destroy the earth while they are at it. The world is made up of sheep and wolves and the wolves will destroy take what they want from the sheep even if it is unfair and inhuman. An economy regulated by laws will create checks and balances and give a safety net for those who can not manage for one reason or another.
Capitalist lack compassion and understanding about the suffering of people of this world. Socialism believe man is basically selfish, let to their own they would not care about the world and eventually most people will suffer.
Is capitalism good?
To understand why capitalism is good consider the alternative. Socialism capitalism’s main alternative is the road to serfdom. There will be greedy and powerful people always, however, under socialism or mixed capitalism, the power is given to bureaucrats and not to creative people called entrepreneurs. Just like there were powerful in the Soviet Union or any state-run by bureaucrats. I live in a post socialist country and see how it destroyed the lives of everyone but the people in government and special interests friends. The people who suffered the most was the poor and middle class.
Bureaucrats are the new oligarchs under a non capitalist system – These people actualized their greed for power by using the government and law to keep their power and keep up the status quo and not competing freely with the rest of society. The haves keep their power using the law and the have-nots are given less chances. Government becomes the funnel for income redistribution penalizing the hard-working and creative and rewarding special interests.
Capitalism like democracy believes that men are basically good and when they act on their enlighten self-interest society as a whole is lifted to a higher level, just compare North Korea and South Korea. Where would you have rather live West German or East German? People would rather work for their own families and then give to the poor like most of the wealthy from Bill Gates to Warren Buffet than being force by the government to give their productive energy working for another man’s wife via redistribution of taxes.
Do I think capitalism works or does not work?
I am an unrepentant capitalist. I think except for some minimal regulation capitalism allows everyone to be the best that they can be. I live in Eastern Europe in a ex-communist country and for anyone who thinks capitalism is wrong or evil or does not work, should come here and see what the alternatives to capitalism did to the people of many countries.
Capitalism is not in my mind connected to religion. I am a religious man, but I think economics and religion are two different things. However, I do think capitalism is the most compassionate form of economics as it gives everyone a chance. Why? The best form of capital is intellectual capital not financial capital. I believe that we are all equal and given talents unique to ourselves.
If you believe anything else you swindle yourself out of your own life. If you tell other people they need help from the government to change their life, you are telling them a lie that they might live. Adam Smith believed men are equal. I similarly believe we are all given different sets of life circumstances but what you do with it is what is important, your life is your canvas. This is why I believe capitalism is good.
What do you think, is capitalism good or bad? Have I given a fair assessment?
10 responses to Is capitalism good or bad?
Capitalism has problems like greed
The problem with capitalism is there is an upper limit to the available resources that are distributed among the people. Further, there is a limited money supply creating stratification in a free society. Greed becomes rampet and the common worker then suffers. This go around shows a government running amuck and being corrupted by big business and money interests. Becos of the exstention of credit , and a lack of base salaries increasing, the common people were lulled into a false belief that there standard of living was improving or at least remaining constant. By using credit instead of saving and building on there money, they became a slave to the credit industry, created inflation, and ultimately caused the current depression. This “effect” is similar to the 1930’s crash that was exasperated by buying stock on margin. All product are fluctuating in value according to supply and demand, we just think bread or a house remands somewhat constant. But this go around should have shown the people that this just isn’t true. In the end the system is a barter system with hi-tech thrown in.
However it is not necessarily these special interest groups fault. They are merely ceasing an opportunity.
It is necessary for a governing body to control corporate and power to prevent destruction and slavery. At this point we are on the verge of slavery. You know this because of the sudden reduction of your income.
After the 1930’s crash safety measures were placed to regulate and prevent such greed takers so this sort of thing would not happen agene. In the lat 70’s Reagan removed these safety measures and once agene the marked went out of control. The problem here is that greed is fundamental and destructive instinct of man and therefore has to be controlled or we will spent the rest of this country’s existents cycling over and over.
Religion involves social reform and the idea of moral behavior among individuals and groups within a society. Is not a company a group with political influence and interests toward the bottom line. so yes religion is a factor. If you will look at your bible, you will see that there are instructions on how to govern and maintain social order. As I see it, the bibles government is somewhat socialist but at least you wont have some people eating stake and driving porches wall others go homeless and starve. The constitution states (possibly a worming) that “as long as there are honest men”, But I haven’t seen many lately, so maybe its time for the big reset and the end of a great nation.
We are on the verge of revolution, this isn’t a good thing. If this nation were to go to war with itself, no one will win. The new government will be radical and will do according to there radical ideas. The foundation of the united states was tolerance to new peoples and religions. Nowadays no one is tolerant of anyone else. And its nothing to backstab your friend so you can get ahead. We aren’t the first to go down this road and we wont be the last. Already, we are invading other country in some obscure name or ideal, or in the most recent case fear, but underneath its all about the money, oil, or some other rescores’ we need to control to maintain our way of life. Some ware along the way, we ceased to be Americans and are becoming that witch many went to war to stop.
So what you gona do, we go through the cycles of governmental control, the rising of nations and eventually there fall,. In the end the only thing you can do is to make sure that you are forgiving, honest , and fare. in your dealings of life.
I understand what you are saying. In the USA there are such extreme views and people are entrenched in this trench warfare of political battles that really does not change much in Washington.
I think the only think you can do is live a peaceful, loving life like you said. But what is wrong with applying your talents to a free market? I am not greedy, but I like to create and hopefully sell things in the market that will be of value for other people.
What is wrong with making money to provide for your family. This is best done in a capitalist economy where there is the freedom to choose your economic life based on your own desires and given talents.
Well stated. i think capitalism is getting a “bum-rap” these days and i believe it is in part due to the way the message (“bad capitalists”) has been touted by the main stream media. Wealth (I humbly submit) is created by Capitalists. The message that they “steal” wealth is generally accepted. I have a degree in economics from a very liberal NY University. I was not taught about Ayn Rand,Hayek and The Road To Serfdom and was told FDR saved us from depression. Years of my own research has corrected my youthful fancies.
Thank you for a well put-together piece.
Capitalism gives you the freedom and choice to be happy
Capitalism is nothing more than the freedom to be yourself in society. I live in a post communist country and trust me you do not want the alternative.
Objectivity is the essence of intelligence and being able to see in a clear way the world works is a very good start to understanding markets. This is better than what any Ivory tower professor says.
For example:
I use to bring goods (amazing halva made of sesame) into Poland made in Ukraine and sell them in an open market. I made money. If the government put its hand in this operation the buyer and the seller would lose.
Even in this simple capitalist model everyone wins. I worked in an honest way and even paid taxes, uhh.
I learned some Polish and Ukrainian (I am American) and got a great experience, and cash so I could spend it in other ways in the local economy. The buyers got non-sweet halva for the holidays not found in Poland.
What is wrong with that?
This is the world when you have freedom. Capitalism is good. Life is an adventure.
Under a government controlled economy, life is gray. Believe me, come to a post communist country and you will see the affects.
Capitialism in ideal is good, but in practice also
I agree with most of what has been said here, I think the best economic system is that of capitalism with very little government interference. What we have these days however is not the ideal capitalist model, in an ideal capitalist model the United States and other Western countries would not have tariffs and other trade barriers attached to foreign goods.also we would not have the government picking winners and losers by bailing certain industries out. I was on a different site earlier and some bone head stated that we needed government regulation of capitalism to avoid recessions like the recent one. Guess he has failed to understand that the true source of the recent recession was due to government interference ( government expenditure keeping the economic bubble going. Sadly these days capitalism does get a bad rap, in reality people have misconceptions about what capitalism truly is, and the mixed socialist capitalist systems are preventing capitalism from working properly.
Serfdom? Get a grip!
If anything leads to serfdom, it is an oppressive system like crapitalism! Socialism is economic democracy in the same way that a republic is political democracy. Crapitalism is a faux democracy of “one dollar, one vote,” and its goal is to overthrow democracy in favor of plutocracy and fascism, as the Obscene Court has demonstrated in their Traitors United decision.
Crapitalism is also totally irrational!
The fact is that economics is in no way a science, especially conartistive economics. What kind of “science” is it that considers cycles of boom and bust to be “normal,” along with a non-zero “optimal” unemployment level. These postulates are merely the self-serving rationalization of those with a vested interest in propagandizing their bias toward a completely irrational, abusive system.
Where do you live? The USA? The land of milk and honey and where capitalism has created such wealth and a large free and mobile middle class? Everytime I fly back home to ‘crisis America’ I see people tanking up big cars and even the poor have TV sets.
Boom and bust cycle created by the central bank
What kind of “science” is it that considers cycles of boom and bust to be “normal,” along with a non-zero “optimal” unemployment level.
60srad. With all due respect I think you have it in reverse.
Most big bust and booms are the creation of Central Banks including the great depression as admitted by Bureaucrat in chef Ben Shalom Bernanke. As far as an “optimal a non-zero “optimal” unemployment” its impossible and irrational. Its the classic illusion from socialist and messianic states.
We can be compassionate toward people losing there jobs with safety net but fudging unemployment figures by creating artificial jobs to show nice statistics is not only delusional and irrational it very expensive and destroys real jobs.
The present recession “Bust” is different thanks to ridiculous Government and Central Bank intervention, artificial rates and guaranties but over all in the last 50 years any one could find a job in America. Government jobs have destroy real job taking billions away from the productive sector toward the unaccountable and an unproductive sector.
By the way did you notice that even Fidel Castro is firing one Million State Employees.
Pretending they worked did not work very well did it ?
Perhaps he is starting to realize that Employment come from demand not the other way around.
Why capitalism is still good - my personal views
Business cycles and their causes
Austrian economists, like the now famous Hayek, Mises,Menger, took the interest rate theory of prices by Swedish economist Knut Wickell and turned it into a theory of business cycles.
That is, a disequilibrium in the money markets, between the real rate of interest (marginal productivity of capital) and bank rate causes shocks in the real sector and a boom and bust cycle.
How to fix the economy
Free markets are a guaranteed way to bring the economy back to equilibrium and real growth. There is nothing better to alleviate economic pain and spread social justice than a free market.This is almost contrary to what people think today but read Adam Smith. It is true.
Even small departures from the idea of free movement of labor and capital, flexible prices, private rather than public market operations will cause non price rationing and disequilibrium. Further this will also end usually but not always in a less just and fair distribution of wealth.
Capitalism and social justice
For example, I want to buy a house. I am a hard working guy. Why should the government be so obsessed with artificially propping up home prices with my tax dollars. I want home prices to fall so my family can have a roof over their heads. But the government is reinforcing the haves at the expense of the have nots when they tinker with market forces. Is this social justice?
Central banks anti social justice role
The central bank plays a big role in this. Men like Alan Greenspan and Ben Bernanke in my opinion are good men, who are honest and soft-spoken academics with conviction and morals. However, the institution which they serve and served, that is the Federal Reserve is the source of so much economic pain.
I have watch countless interviews with Ben Bernacke and only sense from him a good sincere person who is trying to help but really is nothing more misguided and directed in his ideals.
Where I started to be concerned about social justice and economics
When I studied Economics in the 80s at Wake Forest University I remember this same conversation with my economics professors back then. That is why try to steer monetary policy with a top down approach as it can only exacerbate the business cycle and give capitalism a bad name. My professor back then Tony Elavia warned against economic engineering by the government. His ideas in the early 80s were not in vogue but they made sense to me. I aso considered some ideas of a liberation theologist Father Lou who was a Jesuit at the University. Both fueled my interest in the idea of economic social good.
Only when I studied economics at Trinity at a graduate level under Professor Bill Butos, did my passion for economics really take off. Despite much personal mental resistance initially the idea that capitalism created social justice I began to understand what he was conveying. It was an enlightenment argument that when you maximize individual liberties society as a whole becomes better off and more fair and just. It is true, that is why capitalism is good.
Now I have tempered my argument that capitalism is the highest economics order only a little after rereading one of my personal heroes Hans Kung on social justice and economic justice.
But for me this brings me back full circle to enlighten self-interest and the wonderful world of Adam Smith. A capitalism tempered by enlightenment and an understanding of public goods and in a wealthy society a responsibility of to give people opportunities. But in the end money does not solve life’s fundamental problems.
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