If Capitalism is Immoral what System of Economics is Moral?

[Stego]

Are you acting immorally by continuing to live in this capitalistic society?

Absolutely. By my own moral code, I am. I've done a lot of things I find morally reprehensible in my life. But then, that's really none of your business.

[Shryke]

So do you deny that the books, the Internet, gyms, restaurants, WoW, the New England Patriots, and pretty much everything that you clearly seem to enjoy and take for granted was created by a capitalistic society?

Oh, and by the way, many classless societies have existed. Granted, they were small and quickly failed, but they nevertheless existed.

Actually, most of those things were created by a mixed capitalistic-socialist society and it's due to both these factors that they exist.

[Shryke]

Worse than what? Social mobility is good, but it should either be for all alike or be based on some kind of merit or rationale, not blind luck. Class stagnation is bad, but the poor person who magically gets access to a good education, success and a career can suddendly find that his children can't go to good schools because of the lottery. Your system, while not as stagnant, is very unstable and random. The other problems you describe will continue to exist as long as some people are denied a good education while others have access to it.

Pure randomness is a lazy and ineffective policy. If there are limited resources and you consider it unfair they be distributed based on wealth alone then choose a different criteria, but at least base your distribution on one.

I'm not suggesting randomness is the best way, only that it's better then "Luck of the Vagina".

The lottery of birth is pretty much the WORST way to decide something.

[LCOTNW]

I don't want to wade deeply into the question of Communism vs. Capitalism, but I want to try to clarify something about Sergio's point. Maybe people understand it, but from the posts it is not clear to me that this is the case.

Sergio's point (correct me if I am wrong) is that a free market will distribute resources to those with the ability to pay, and that in theory does coincide with the most efficient use of resources most of the time. I think its confusing when Sergio separates the concept of ability to pay from efficient distribution because that is exactly how the free market attempts to distribute resources efficiently.

If a poor person has a house near the coast and is vulnerable to storm damage, we might feel sorry for that person and want them to have access to resource to protect their home. However, from an economics standpoint, it may be inefficient to continue to shell out resources in this manner every time a storm hits.

Sergio is kind of dancing around this point, probably because it is the hardest part for most people to swallow: a free market would be telling the poor person living near the coast that they cannot afford to live there and they should move somewhere more fitting with their income level and ability to protect their assets. Not a government official, not a totalitarian bully, but rather common sense based on what the person can afford. A person who continues to stubbornly build a home that they do not have the means to protect is wasting resources. Under a free market, the poor person's house *should* be destroyed in this example.

By the same token, a company that moves its production overseas to take advantage of cheap labor is presumably following free market principles. A pure free market approach would tell the newly unemployed workers to go retrain for a different industry. This may be the most efficient economic result, but of course it is hard to accept if you are one of the unemployed workers expected to go learn how to do a new job, and the market probably hasn't protected the workers from the costs of unemployment.

We don't care about the demise of inefficient companies or industries because that is necessary for progress. However, we do care about the suffering of the unemployed, and that is the basis for social programs to ease the bumps in the road created by the machinations of the market.

Getting back to the hurricane example, if rich person A and poor person B live near the ocean, and Rich person C lives inland (but still in the path of the hurricane). The value of the houses of both rich people are $750,000 (each). The value of the poor person's house is $100,000. If no one gets plywood, and everyone has catastrophic damage to their homes, the rich people lose more than the poor person does because the rich people have more to lose. If you could pick 2 of these people to get plywood and the other gets none due to scarce resources, how would you distribute it? the free market would distribute it to the rich people, not based on some moral code, but based on the fact that this produces the most efficient outcome. As an economy, we are worse off, overall, if we allow a $750,000 house to be destroyed instead of the $100,000 house.

Whether we feel comfortable with that on a moral basis is a different question. I'm no libertarian, but I understand why they feel the way they do. We might feel that it is wrong for the poor person to lose their home, but if we act on it then we are valuing something higher than economic efficiency. The same would be true if the government stockpiled plywood for emergencies so that the supply would meet the demand. It may make us happy that everyone is protected, but it still may not be the most efficient use of resources. The effort we put into the plywood stockpiling program means less resources are given to other programs, and less plywood is available for other uses that it might be put to, possibly at a higher value.

All of this, of course, is an exercise on paper, and with both communism and capitalism the real-world application is far worse. In particular, capitalism certainly does produce waste for a variety of reasons, including the corruptive influence of a system which rewards accumulation of capital and absolves the rich by saying that it is solely the result of market efficiency. Instead of being motivated to produce wealth, the rich are sometimes motivated purely to protect wealth, and it is harder to justify the overall social benefit of that. Social programs also produce "waste" by preventing the free market from functioning efficiently (to protect other interests). Another disadvantage of the free market is that it is not conscious, so it cannot always differentiate between short-term and long-term efficiency, and it works at its own speed. Sometimes it is very quick, and sometimes is is far too slow. Poor people do suffer a lot under capitalism because they are the ones that are the worst prepared to deal with changes in the market. The main difference between libertarians and socialists is their level of tolerance for it, and neither approach is immoral by its definition.

[Mentat]

The lottery of birth is pretty much the WORST way to decide something.

Well, from an economic viewpoint it's a matter of incentives. In a capitalist society the incentive is usually to become wealthy, so that, in this case, you can pay for your children to go to the best schools possible. Of course, this is a pretty selfish incentive, which might be fine if you follow Ayn Rand, but I find reasonable that some people object to.

It's not the worst possible incentive, though, only selfish.

The total lack of an incentive I'm not sure is a better alternative. At least good schools for the rich motivate people to work their asses off, invest in real estate in a good neighborhoods and get an interest in their children's education. Of course the filthy rich by birth will be there too, which is of course the downside.

If you just assign the places in good schools through a lottery you're not (in my opinion) creating any tangible social justice and you are creating a few problems like children having to commute to the school luck would have rather than going to the school nearer home, etc.

[Peter Irving]

sergio the argument from authority by using the chicago school is not a very good idea.

[Ser Scot A Ellison]

PI,

How is thaty any worse than using Keyensian arguments in the same manner. The school of thought that brought us the economic wonder that was the 1970s.

[Tormund Ukrainesbane]

Well, from an economic viewpoint it's a matter of incentives. In a capitalist society the incentive is usually to become wealthy, so that, in this case, you can pay for your children to go to the best schools possible. Of course, this is a pretty selfish incentive, which might be fine if you follow Ayn Rand, but I find reasonable that some people object to.

It's not the worst possible incentive, though, only selfish.

The total lack of an incentive I'm not sure is a better alternative. At least good schools for the rich motivate people to work their asses off, invest in real estate in a good neighborhoods and get an interest in their children's education. Of course the filthy rich by birth will be there too, which is of course the downside.

If you just assign the places in good schools through a lottery you're not (in my opinion) creating any tangible social justice and you are creating a few problems like children having to commute to the school luck would have rather than going to the school nearer home, etc.

The school thing is retarded because it assumes that the schools rich kids go to are good schools because of some bizarre random coincidence. Children in these schools do well because, by and large, rich people take more of an interest in their kids education and the poor do not. Randomly mixing up the kids will likely have the net effect of the both sets of parents continuing to do the same, while over all decreasing the quality of all schools. The formerly successful schools will fail due to the influx of failing students. The formerly failing schools will continue to fail, and likely drag formerly successful students with it.

[White Walker Texas Ranger]

Most economists would say that any price controls, subsidies, or tariffs are bad for their economies.

Not quite. I'm pretty sure most Economists (Mankiw at the very least) would agree that subsidies and taxes to correct externalities or manage common goods are efficient.

[Peter Irving]

PI,

How is thaty any worse than using Keyensian arguments in the same manner. The school of thought that brought us the economic wonder that was the 1970s.

It just as bad now using examples of the systems supposedly working is fine in my book.

[Tormund Ukrainesbane]

Most economists would say that any price controls, subsidies, or tariffs are bad for their economies.

We see in the discussion of the Federal Reserve that most economists demand price controls on the most important good of all, money. The interest rate is the price of money, and apparently, no one serious argues against price controls on it.

[tzanth]

Oh, and by the way, many classless societies have existed. Granted, they were small and quickly failed, but they nevertheless existed.

Actually classless society is one of the most enduring social forms in human history. Additionally, far from working from "sun-up to sun-down," most classless societies only feature some 4-5 hours of work per day.

[Tormund Ukrainesbane]

Actually classless society is one of the most enduring social forms in human history. Additionally, far from working from "sun-up to sun-down," most classless societies only feature some 4-5 hours of work per day.

Hehe, hunter gatherer lifestyle. Shryke encourages me to pursue one all the time.

[tzanth]

Hehe, hunter gatherer lifestyle. Shryke encourages me to pursue one all the time.

Actually, many hunter-gatherers do have class systems. The Haida and other Northwest coast groups are case and point. On the other hand, some horticultural groups are classless and feature similarly low workloads. Its the cultural system of integration that matters, imo, rather than just the direct result of your subsistence strategy.

[Lord Mord]

TM,

The school thing is retarded because it assumes that the schools rich kids go to are good schools because of some bizarre random coincidence. Children in these schools do well because, by and large, rich people take more of an interest in their kids education and the poor do not. Randomly mixing up the kids will likely have the net effect of the both sets of parents continuing to do the same, while over all decreasing the quality of all schools. The formerly successful schools will fail due to the influx of failing students. The formerly failing schools will continue to fail, and likely drag formerly successful students with it.

Do you have statistics for the parenting that rich people do being demonstrably better than that done by poor people?

[一方通行]

oh god, i agree with Shryke.

im so confused. :unsure:

[Shryke]

Well, from an economic viewpoint it's a matter of incentives. In a capitalist society the incentive is usually to become wealthy, so that, in this case, you can pay for your children to go to the best schools possible. Of course, this is a pretty selfish incentive, which might be fine if you follow Ayn Rand, but I find reasonable that some people object to.

It's not the worst possible incentive, though, only selfish.

The total lack of an incentive I'm not sure is a better alternative. At least good schools for the rich motivate people to work their asses off, invest in real estate in a good neighborhoods and get an interest in their children's education. Of course the filthy rich by birth will be there too, which is of course the downside.

If you just assign the places in good schools through a lottery you're not (in my opinion) creating any tangible social justice and you are creating a few problems like children having to commute to the school luck would have rather than going to the school nearer home, etc.

You are still not getting it. The lottery, while perhaps not the best idea, is better then the Vaginal Lottery because the Vaginal Lottery creates, encourages and promotes some fairly bad societal trends. None of the other systems do this nor do they replace it with anything anywhere near as bad.

You may not be creating any tangible social justice (although I think it's obvious you'd be creating SOME), you are not promoting any sort of class based crap either.

[TerraPrime]

[mod hat]

Let's have less personal snipes at each other, and more topical debate.

Thank you.

[/mod hat]

[TerraPrime]

Re: Ser Scot

How is the Government offical distributing plywood disintersted? Perhaps this person needs a powerful sponsor and will give the wood to the powerful rich person anyway? Perhaps this person is terrified and will give the wood to the first person who asks for it regardless of "need". For that matter how is this offical defining and applying the definition of "need"?

Since capitalism requires rational actors, I think it's fair to allow that communism will have rational actors, as well. In the case of capitalism, the rational actors are the consumers. In the case of communism, the rational actors are the government committees. So, you might as well ask how do we know that under a capitalist system, someone won't end up buying up all the plywood just for fun? I think in a discussion like this, you have to allow the assumption that the model will work according to the rules. The rules of a centralized system are that the needs for a particular commodity are recorded, then passed along to a committee deputized to make decisions, and the committee will adhere to a set of guidelines in making that decision, and then execute those decisions.

Re: Communism v Capitalism

In broad strokes, I really don't see why 1 system is inherently more efficient than others. In a capitalist system, if I want to manufacture a Widget, I have raise capital, which means I have to convince a small group of people (bankers, investors, and capital venturists) to loan me the money, with a promise that I will repay their loan, with interest. In a communist system, if I want to manufacture a Widget, I need to convince a central committee that it is better for the collective, and if the committee agrees, they'll implement it.

But I suppose efficiency is apart from morality. I'll ponder on the morality issue more.

[Ser_not_appearing_yet]

I'm far from an expert on this, but I don't believe that the age at which you begin reading has a lot to do with a persons evolutionary success (nor does their income for that matter). "Fittest" in the Darwinian sense is really only talking about your ability to have children, and for your children to have children. Any genetic trait that increases the odds of you having kids and your kids surviving makes you fitter. I'm not sure either literacy or wealth are a genetic traits, but as far as I'm aware the rich tend to have fewer children than the poor and so if wealth were a genetic trait it might even be a negative one.

If you want to make Darwinian fitness the benchmark by which to judge people, that woman with 16 kids who had octuplets recently is probably winning. Provided a reasonable proportion of her kids survive and have children of their own. :P

Oh, then i stand corrected. Its still natural selection in one sense however, in that those best suited for the climate prosper (in this case those with good business acumen or whatever).

Not going to debate a subject I'm ignorant on though.