Capitalism

[dave the caveman]

You're talking about people with tens of thousands of pounds worth of education and a CV stacked with a lifetime's worth of experience in banking and economics shifting responsibility onto desperate, every-day folk who don't know their ISA from their CCJ. They should have had the experience and the intelligence to project that lending so nonchalantly was going to cause trouble.

Easy to say with the benefit of hindsight. In five years you'll be able to look back at the way things are being handled today and pick out exactly where we are wrong and why, but can you do it now? No. And neither can anybody else. That's why 'expert' economists disagree about everything, all the time. None of them really know what is going to happen because they can't predict the future. Economics is simple only when looking backwards.

There should probably have been tighter controls on lending but who wants to hear that during the boom years? The banks didn't lend knowing they were going to take a hammering. They just got it wrong. And what government is going to effectively restrict the ability to lend and borrow? That's the opposite of what they want and they'd be opening themselves up to all manner of 'big brother' and 'nanny state' accusations.

I'm not saying that the government or the lenders are not to blame, because they did make mistakes, but to place all of the blame on them is wrong imo. Financial institutions and governments are nothing but groups of people sitting behind desks trying to make sense out of extremely complex situations and they can and will get things wrong. Just like all the people who borrowed more than they could afford to repay got it wrong too.

[dave the caveman]

The credit crunch wasn't because people were personally borrowing more than they could afford to it was because people were being allowed to borrow more than they should have been allowed to. Banks started selling off their debts as bundles of loans to the East (China etc) they were making loans easier and easier to get hold of by reducing the criteria needed to gain them and then bundling up good loans with these 'bad' loans so they could sell it on, that would get bundled up and sold on again and again until the bad loans that weren't able to be paid off create massive holes.

As above, I don't think it was realistic to expect the government to stop people borrowing. Personally I would be quite offended if I applied for a mortgage only to have someone from the government phone me up and say 'no, Dave, we think you're probably a bit shit at budgeting so we're not going to let you have that loan'.

That isn't the problem in Greece at all!!!

This isn't to do with your average Greek citizen. Its not a case of them not wanting to pay taxes, they don't want to have to be paying for the rest of their lives to make up for the mishandling of the country by their government and the corruption of the elite. The average Greek will have to put on hold any hope of a decent education, decent job etc because they'll have to pay through the nose in taxes to make up the deficit.

The Greeks haven't only just stopped paying taxes, they've never been very good at it. The people of Greece can hardly blame the government for overborrowing when they themselves were refusing to pay what they legally owed. Maybe if they paid their taxes, the goverment wouldn't have been living beyond its means.

I'm sure a fair portion of the problem in Greece is to do with financial mismanagement at a high level as well though, to be fair. But that's not what 'Occupy Wall St' is about because it has fk all to do with Wall St. It's not even what the Greeks are protesting about. They're protesting because they think they deserve a government who can afford to rain lavish luxuries on them while they continue not to pay tax.

Do you live in the real world??

I think so

[21st Century Fox]

As above, I don't think it was realistic to expect the government to stop people borrowing. Personally I would be quite offended if I applied for a mortgage only to have someone from the government phone me up and say 'no, Dave, we think you're probably a bit shit at budgeting so we're not going to let you have that loan'.

The Greeks haven't only just stopped paying taxes, they've never been very good at it. The people of Greece can hardly blame the government for overborrowing when they themselves were refusing to pay what they legally owed. Maybe if they paid their taxes, the goverment wouldn't have been living beyond its means.

I'm sure a fair portion of the problem in Greece is to do with financial mismanagement at a high level as well though, to be fair. But that's not what 'Occupy Wall St' is about because it has fk all to do with Wall St. It's not even what the Greeks are protesting about. They're protesting because they think they deserve a government who can afford to rain on tnem lavish luxuries while they continue not to pay tax.

I think so

This explains it pretty well.

http://www.thisamericanlife.org/radio-archives/episode/355/the-giant-pool-of-money

[Bellend Sebastian]

Check dis shit:

http://www.rollingstone.com/politics/blogs/taibblog/owss-beef-wall-street-isnt-winning-its-cheating-20111025

[Captain...]

Easy to say with the benefit of hindsight. In five years you'll be able to look back at the way things are being handled today and pick out exactly where we are wrong and why, but can you do it now? No. And neither can anybody else. That's why 'expert' economists disagree about everything, all the time. None of them really know what is going to happen because they can't predict the future. Economics is simple only when looking backwards.

But we can look to the past and see what happened when similar actions took place, for example slash and burn policy to reduce debt and cut spending led to a double dip depression in the 80s, and yet we are making the same mistake again, with the same consequences. There has also been worries about the amount of debt that had been amassing, personal debt and national debt but not enough was done about it during the periods of growth.

There should probably have been tighter controls on lending but who wants to hear that during the boom years? The banks didn't lend knowing they were going to take a hammering. They just got it wrong. And what government is going to effectively restrict the ability to lend and borrow? That's the opposite of what they want and they'd be opening themselves up to all manner of 'big brother' and 'nanny state' accusations.

There were tighter controls, especially in the states, but in the UK too and they were relaxed to allow the growth to continue, even though everyone knows that boom is also followed by bust, and the longest sustained period of growth was always going to risk a massive backlash and a bust.

I'm not saying that the government or the lenders are not to blame, because they did make mistakes, but to place all of the blame on them is wrong imo. Financial institutions and governments are nothing but groups of people sitting behind desks trying to make sense out of extremely complex situations and they can and will get things wrong. Just like all the people who borrowed more than they could afford to repay got it wrong too.

The blame is on the system, what furstrates me most about captilism, or any system, is that we create it, we set out the rules, then we proceed to bend them, break them and exploit them for personal gain. Look at money, what is money? It is basically numbers that we have attributed a value to, and it is this value/worth that we can control and we have always controlled and yet we have lost this control so much so that now it controls us. Some of the smartest people in the world are responsible for creating a monetary system whereby it is cheaper in poorer countries to buy tomatoes imported from developed countries and let their own tomatoes rot on the vine then spend the money on picking them.

Capitalism is flawed in the fact that one of its main principals is to make as much profit as possible (and everyone knows for you to make a profit someone else has to make a loss), and in the way it exists now money breeds money. It is not a bad thing to encourage people to be the best they can be and without capitalism we wouldn't have had as many innovations in the last 50 years, but it is now no longer a level playing field those with money find it much easier to make more and those without find it harder to maintain.

What makes it worse is that why that riches are shoved down our throat at every available opportunity, look at football, the ridiculous amount of money the players earn and the extortionate prices we lap up to feel a part of their world. Aspirational TV just serves to remind us of the mundanity of our lives and make us crave the clothes, the cars and the lifestyle of the rich without having the resources, so we beg, borrow and steal to feel part of this society.

[dave the caveman]

But we can look to the past and see what happened when similar actions took place, for example slash and burn policy to reduce debt and cut spending led to a double dip depression in the 80s, and yet we are making the same mistake again, with the same consequences.

That remains to be seen. They just announced growth of 0.5% today. That's very positive news. There is no sign of us entering a double dip for the time being to to say we are suffering "the same consequences" is just wrong. The media is full of negativity as always but most of that is noise to be ignored.

The blame is on the system, what furstrates me most about captilism, or any system, is that we create it, we set out the rules, then we proceed to bend them, break them and exploit them for personal gain. Look at money, what is money? It is basically numbers that we have attributed a value to, and it is this value/worth that we can control and we have always controlled and yet we have lost this control so much so that now it controls us. Some of the smartest people in the world are responsible for creating a monetary system whereby it is cheaper in poorer countries to buy tomatoes imported from developed countries and let their own tomatoes rot on the vine then spend the money on picking them.

Capitalism is flawed in the fact that one of its main principals is to make as much profit as possible (and everyone knows for you to make a profit someone else has to make a loss), and in the way it exists now money breeds money. It is not a bad thing to encourage people to be the best they can be and without capitalism we wouldn't have had as many innovations in the last 50 years, but it is now no longer a level playing field those with money find it much easier to make more and those without find it harder to maintain.

What makes it worse is that why that riches are shoved down our throat at every available opportunity, look at football, the ridiculous amount of money the players earn and the extortionate prices we lap up to feel a part of their world. Aspirational TV just serves to remind us of the mundanity of our lives and make us crave the clothes, the cars and the lifestyle of the rich without having the resources, so we beg, borrow and steal to feel part of this society.

Some fair criticisms here but not much in the way of a solution.

I don't agree much with the last paragraph as I think that assumes most people are totally dumb when they're not. If people didn't want to consume unnecessary expensive crap then they wouldn't. Under this system nobody forces anybody to do anything and that is something we should treasure.

[breadandcheese]

Capitalism is flawed in the fact that one of its main principals is to make as much profit as possible (and everyone knows for you to make a profit someone else has to make a loss), and in the way it exists now money breeds money. It is not a bad thing to encourage people to be the best they can be and without capitalism we wouldn't have had as many innovations in the last 50 years, but it is now no longer a level playing field those with money find it much easier to make more and those without find it harder to maintain.

That's simply incorrect. That's cheap economic theory which sounds plausible, only in reality, is false as it ignores many other factors.

As new processes and techniques become more productive, goods and technology become cheaper, everyone wins. Nobody "loses" out. It is simply untrue to make an absolute statement that for someone to make a profit, someone else has to make a loss.

[FoxyPV]

Marxism is a relatively new economic theory as it's just over 100 years old, so if it is to take off then it will probably not even be in our great granchildrens' lifetimes.

The best thing that ever happen capitalism was the Wall Street Crash as it made everyone realised that there needed to be a social edge to the new ecomonic structure. From this was born liberal capitalism and from there, the foundations etc of the social state.

[Babylon]

Not sure I can take people seriously who dress up as "banker zombies" and dance to Michael Jackson to make their point.

[Rincewind]

With all the wastage there is probably enough food and resources to go around but that would mean prices would come down because the demand would be less and then the bosses of companies would lay people off or reduce wages for the workers meaning the poverty line would be raised and the overload on resources and food wood be shared out to a larger proportion of the population....etc

[Captain...]

That's simply incorrect. That's cheap economic theory which sounds plausible, only in reality, is false as it ignores many other factors.

As new processes and techniques become more productive, goods and technology become cheaper, everyone wins. Nobody "loses" out. It is simply untrue to make an absolute statement that for someone to make a profit, someone else has to make a loss.

But they do, that is in essence what profit is, the bit you steal off the person by over charging for you goods or services, even when you factor into it standard profit, which is (well was when I studied this) taken as a part of the cost.

You buy something lets say a Toy for 10p you factor in all other costs transport/packaging/administration/standard profit and you have a cost of 20p you then sell it for 50p. The person you are selling it to is paying 50p for something that cost 20p. You then use that to buy another toy for 20p. Now you have turned a Toy into a Toy and 30p the person who bought it now has something that is only really worth 10p and so has lost out 40p.

I understand things like economies of scale, so buying things in bulk allows you to get a better price and cut transport costs, but still in the end you have sold something for greater than its value.

[Webbo]

But they do, that is in essence what profit is, the bit you steal off the person by over charging for you goods or services, even when you factor into it standard profit, which is (well was when I studied this) taken as a part of the cost.

You buy something lets say a Toy for 10p you factor in all other costs transport/packaging/administration/standard profit and you have a cost of 20p you then sell it for 50p. The person you are selling it to is paying 50p for something that cost 20p. You then use that to buy another toy for 20p. Now you have turned a Toy into a Toy and 30p the person who bought it now has something that is only really worth 10p and so has lost out 40p.

I understand things like economies of scale, so buying things in bulk allows you to get a better price and cut transport costs, but still in the end you have sold something for greater than its value.

You're not forced to buy that toy. If you don't like the idea of the man who imports the toy at his expense and takes a risk on it selling or not making a profit you can always go over to China and buy it yourself.

[breadandcheese]

But they do, that is in essence what profit is, the bit you steal off the person by over charging for you goods or services, even when you factor into it standard profit, which is (well was when I studied this) taken as a part of the cost.

You buy something lets say a Toy for 10p you factor in all other costs transport/packaging/administration/standard profit and you have a cost of 20p you then sell it for 50p. The person you are selling it to is paying 50p for something that cost 20p. You then use that to buy another toy for 20p. Now you have turned a Toy into a Toy and 30p the person who bought it now has something that is only really worth 10p and so has lost out 40p.

I understand things like economies of scale, so buying things in bulk allows you to get a better price and cut transport costs, but still in the end you have sold something for greater than its value.

That's a marxist point of view. That all profit is stealing from the proletariat. It sounds great, as it's simplistic logic that seemingly makes sense. However, simplistic logic does not always mean it's right. It's the same simplistic logic that appeals to idiots when some bright spark stands up and says, we could solve unemployment by getting rid of foreign workers and giving their jobs to our own. You've taken a far too simplistic basis point as your start point.

In your example above, the profit bit is the incentive bit. Without it, that person would not supply the toy at all. Then there are no toys for anyone and everyone is worse off.

Profit, brings competition, reducing prices. No-one loses. Competition brings investment in new productive capacity and techniques. Eventually, it may be that the toy only costs 5p to produce due to improved production techniques. Then prices can drop again and the toy becomes affordable to that many more people.

Without profit, there is no incentive and therefore no driving guiding force in the market. There is then no way to determine the level of supply of certain goods and no way of meeting the people's wants and desires. The case in point was the USSR where there were huge shortages of certain goods, not helped by chronic underinvestment in plant and machinery. In many cases, farms and industry were using equipment that was over 50 years old, on the basis that there was no need to replace it for more productive modern machinery. After all, it did not affect how much money they received at the end whether they used new productive techniques or old redundant ones.

I suggest reading Ludwig von Mises and his tearing apart of Marxism.

[breadandcheese]

Marxism is a relatively new economic theory as it's just over 100 years old, so if it is to take off then it will probably not even be in our great granchildrens' lifetimes.

The best thing that ever happen capitalism was the Wall Street Crash as it made everyone realised that there needed to be a social edge to the new ecomonic structure. From this was born liberal capitalism and from there, the foundations etc of the social state.

Hopefully Marxism will never take off again.

You make it sound like liberalism is a new thing. The likes of Cadbury's, Arkwright, Wedgewood, were doing this during the industrial revolution, looking after their workers, building housing and schools. There is good. There is bad. That is a phenomenon of people.

[FoxyPV]

Hopefully Marxism will never take off again.

You make it sound like liberalism is a new thing. The likes of Cadbury's, Arkwright, Wedgewood, were doing this during the industrial revolution, looking after their workers, building housing and schools. There is good. There is bad. That is a phenomenon of people.

Here's where we disagree but I hope Stalinist/ Leninist - Marxism never takes off again. Marxism in its own right is brilliant ideology although it needs a bit of updating for the post-modern era.

I'm not saying that it is a new thing (although it took a couple of centuries to get off the ground) but the WSC brought the need for liberalism to the fore amongst the first world industries.

I always thought that if the WSC had never happened we may have seen more Marxist states but ah well.

[Trav Le Bleu]

Yes. Pretty basic situation.

Big Bad Capitalist USA

Communist Cuba

30 odd miles apart, in one of the countries thousands of the residents each year risk their life trying to swim/sail through shark infested waters to get to the other one, I'm sure you dont need telling which one it is.

Captilism isnt perfect by any means, but its the best system I have seen, I would hate to live in a country that doesnt suppore free market capital and the opportunity to be the best you can be.

And yet Cuba has a higher literacy rate.

[Rincewind]

And yet Cuba has a higher literacy rate.

In Cuban

[Webbo]

And yet Cuba has a higher literacy rate.

What good is that if govt decides what you're allowed to read?

In Cuban

[Captain...]

That's a marxist point of view. That all profit is stealing from the proletariat. It sounds great, as it's simplistic logic that seemingly makes sense. However, simplistic logic does not always mean it's right. It's the same simplistic logic that appeals to idiots when some bright spark stands up and says, we could solve unemployment by getting rid of foreign workers and giving their jobs to our own. You've taken a far too simplistic basis point as your start point.

In your example above, the profit bit is the incentive bit. Without it, that person would not supply the toy at all. Then there are no toys for anyone and everyone is worse off.

Profit, brings competition, reducing prices. No-one loses. Competition brings investment in new productive capacity and techniques. Eventually, it may be that the toy only costs 5p to produce due to improved production techniques. Then prices can drop again and the toy becomes affordable to that many more people.

Without profit, there is no incentive and therefore no driving guiding force in the market. There is then no way to determine the level of supply of certain goods and no way of meeting the people's wants and desires. The case in point was the USSR where there were huge shortages of certain goods, not helped by chronic underinvestment in plant and machinery. In many cases, farms and industry were using equipment that was over 50 years old, on the basis that there was no need to replace it for more productive modern machinery. After all, it did not affect how much money they received at the end whether they used new productive techniques or old redundant ones.

I suggest reading Ludwig von Mises and his tearing apart of Marxism.

But that is exactly why it is a flawed system because the incentive is money, basically it is institutionalised greed.

I understand the benefits that you talk about, and even said in my initial post that without capitalism we wouldn't have had the technological advancements in the last 50 years, this is the main reason why communism has never quite succeded because of the lack of incentive.

That doesn't mean that innovation cannot happen under other systems, there are other motivations than personal greed, such as the general good and welfare of the state.

[DANGEROUS TIGER]

http://www.youtube.com/watch?v=ju3h7yk4Hcg

Why was I expecting something a bit more like this from DANGEROUS TIGER?

All right, own up. Who secretly filmed me? .Was this the time when my local Labour candidate, had the nerve to ask me to vote for him?

[BoneDog]

Having a debate about which is better, Capitalism or Socialism, seems a bit pointless really because we have neither system. Both of those systems could work well for the majority if they were implemented correctly, but of course it all depends on the major actors / players at the top of the system.

What we do have, I believe, is a mixture of Kleptocracy and Plutocracy here in the UK and the US. Just a bunch of corrupt evildoers who get away with paying no taxes out of their trillions and then have the nerve to force us to bail them out. And we allow it!

[Rincewind]

Watching a programme about Tin Tin. The creater Herge was commissione by a newspaper editor to do the cartoons. He was a priest and a fciest, very anti-communist and the Tin Tin stories reflected this. Herge hardly ever left Belgium and getting his information from a book he was given and photographs. I didn't know all this and only remember Tin Tin from the TV cartoons and cant recall them much. It just shows how much propoganda can influence people from an early age. The cartoons depicted a Russia where the peopple were opressed and Herge even used some of the writings from the given book for to use in the strip cartoon.

On a side note the reporter of the programme is wheelchair bound and had to catch a train in Brussels and he said he finds it strange that with all the rules that come from there there is no wheelchair facilities in place at Brussels train station.

Very interesting programme though. He's following the journey did in one of the first cartoons. so its informing about how things were in the 1920's Russia and how its changed.

Programme on BBC4 about to start interviewing Herge.