(fundamentally in a capitalist society that recognises no moral restraint on money and it's not illegal ... why not? Surely you take as much money from the investors as you can and pocket exactly as much as you can get away with without being prosecuted? Anything less would be economically inefficient! /s)
It's worth noting that luminary capitalists like Adam Smith were very much concerned with privately enabled rent seekers in addition to government enabled ones.
There's nothing inherently capitalist about corruption. It's a property of power, not capitalism.
And in reality, when/where can we find an actual state of equilibrium where no one has an unfair market advantage?
Here's an anecdote: I've received hundreds of thousands of euros from my parents (in my early 30's), they fully paid my education in a well-known private lycée, a nice "classe prépa", an expensive French business school. They paid everything until I get a highly paid job in a European startup, incl. some student exchange programmes abroad. I'm getting dozens of €K a year as gifts (with absolutely zero taxes). I own a big flat in one of the most expensive city in the world (where prices keep rising), and tones of shares on the stock market (4x in a few years, thank you Wall Street). My gains on the sale of these stocks are taxed far below my salary, so I'm not working too much (I'm already saving 2/3 your yearly revenues, and own ~6x the median wealth in my country). etc. You probably get the point. I'd be glad if anyone can explain how I'm not taking advantage of an extremely unfair advantage, and what Smith (or any other liberal economist) suggests to reach a state of equilibrium where I have to compete fairly with my fellow citizens.
There may have been more actual equilibrium in Smith's time. Mayer-Schonberger (Oxford) pointed out that, "...price is compromised by the very fact that it abridges the information available to the market." The conclusion, of his interesting but incomplete argument, is that price (traditionally understood) becomes increasingly untethered to reality as the digital economy overtakes the physical.
One could argue that looking far enough back, certain types of unfair advantage might only get reset by mobs with torches and pitchforks (or, more recently, yellow jackets).
I agree with you. Another way of saying this is that corruption is a property of human nature.
It seems that the most persistent problems we face often are. We can change our system of economic organization and politics but in the end the system is made up of individuals. Individuals who have all the same sort of flaws and who struggle with their human nature. It takes a lot of will and effort for a person to behave honestly and ethically. The interaction of peoples behaviors and the system they are in is a two way street.
I guess what I am saying is that we need to do the hard work of behaving better ourselves if we want to make our industry, community etc a better place.
> I agree with you. Another way of saying this is that corruption is a property of human nature.
Although this may be correct, it could also be the case that some systems nurture such "corruption" more than others. Changed societies produce changed people. For example, the widespread desire for fame only arose around the start of the 15th century but it really does seem quite natural to us now. A famous economist once wrote,
>Economists have a singular method of procedure. There are only two kinds of institutions for them, artificial and natural. The institutions of feudalism are artificial institutions, those of the bourgeoisie are natural institutions. In this, they resemble the theologians, who likewise establish two kinds of religion. Every religion which is not theirs is an invention of men, while their own is an emanation from God. When the economists say that present-day relations – the relations of bourgeois production – are natural, they imply that these are the relations in which wealth is created and productive forces developed in conformity with the laws of nature. These relations therefore are themselves natural laws independent of the influence of time. They are eternal laws which must always govern society. Thus, there has been history, but there is no longer any. There has been history, since there were the institutions of feudalism, and in these institutions of feudalism we find quite different relations of production from those of bourgeois society, which the economists try to pass off as natural and as such, eternal.
It is not a property of human nature. It is endemic in human societies. That hair splits easily, if your knife is sharp enough.
We tolerate the corruption that comes with certain societal structures, because we gain more by having them than we lose from the corruption. You can't scale anything to national or international size without introducing a principal-agent problem.
It is not a property of human nature. It is endemic in human societies.
Pardon me, but I'm not immediately seeing the distinction, maybe I've read the statement wrong and found the wrong conclusion. Can you clarify/unpack that statement a bit? If it's not a property of human nature, how is it then endemic in human societies?
Does not the second sentence you're offering here completely betray the first?
The moral constraints on a human person are not the same as those on a human society. To say corruption is a property of human nature is to suggest that everyone is willing to be a source of corruption, rather than to suggest that everyone can be made to support the corruption of others under certain conditions.
Assume, only for the purposes of argument, that 10% of all humans would betray trust for personal gain.
In a close-knit, tribal society, limited by the human brain capacity for maintaining personal relationships, where everyone knows everybody else, it is not very profitable to betray a trust. After the first time someone does it, many of their peers revoke their trust, and that person then has to re-earn enough of it to reneg again. Each time, it becomes harder to get ahead.
In order to grow societies of larger sizes, we instituted trust-by-default relationships, just to make goods move from the loading docks. If human nature is 90% trustworthy, this is 90% safe. The remaining 10% can be dealt with via retaliatory mechanisms: bond revocation, lawsuits, arrests, etc. As long as the individual responsible can be identified, and punished, there is significant disincentive to reneg.
To grow larger still, we instituted pseudo-anonymous legal fictions. We started doing business with companies, instead of people. This provided an opening for the renegade 10%. They could let the company establish trust, take control of it or a portion of it, betray the trust for personal gain, and let the corporate shell take the brunt of retaliation--if anyone ever even found out about the betrayal. The type of person who would become corrupt is drawn to positions that are corruptible: the bosses of businesses and bureaucracies, and the cronies and collaborators of those corrupt bosses. The ultimate goal of a corrupt person is to be the fox in charge of a henhouse--nay, in charge of a whole poultry farm.
Whenever we rely on structure rather than people to manage societal complexity, the structures may be attacked whenever no one else is looking. The corporation cannot refuse to do as the CEO demands, as it has no will of its own. You can't watch everyone all the time; we just can't afford the costs of that kind of labor, that only humans can do. And whatever human oversight mechanism you may institute can then be infiltrated by the corrupt 10%, who can collude to profit from failure in oversight.
Qui custodiet custodes? It's corrupt cop-watching cops, all the way down.
It's like an auto-immune disorder. How can your body possibly defend itself from its own immune system, at the same time as all the foreign pathogens? So the corruption becomes endemic, because there are not enough people watching to keep everybody honest all the time.
If you put out a tray of goods with a price label and honor box, 90% of people will pay the correct amount if they take something. It only takes one renegade to empty the tray, break open the honor box, and ruin the whole thing for everyone. Or even just to take goods from the tray without paying, one at a time, until the profits are all gone. It's not worth paying someone to watch one tray. So set up a camera to watch it. That just adds a separate camera-disabling step for the renegade. Put up a camera-watching camera. The renegade tapes a photo of the tray-watching camera over the lens, disables it, then loots the tray. It's an arms race. The only way to win is to put another human in the loop, and the instant you do that, you have to pay them, and then your profit margin is shot. Besides that, there's always the 10% possibility that the person you pay to watch your tray is a corruptible individual, and they'll just go halfsies with the tray-looter.
Capitalism, as a class, is only meaningful in the sense that it provides some sort of constraint on free enterprise, otherwise capitalism doesn't mean anything at all. If it fails to apply a constraint on free enterprise that fails to address some fundamental corruption, then yes, that is a failure of the constraint.
I was responding that power produces corruption. There's no incorruptible alternative to capitalism because any alternative still gives people power to abuse.
I think there is still room to explore "less corruptible" alternatives. It is easy to fall into the "law of excluded middle" trap. If we are only willing to accept an incorruptible alternative to a current system then we are not likely to make progress.
I mean, this is how we ended up where we are today: we've been iterating on the set of laws and regulations surrounding the economy finding the best tradeoffs and we're yet to find something perfect. The problem is that that discussion tends to get into rather technocratic, wonky territory pretty quickly and bores people a hell of a lot more than making crazy eyes at the audience and ranting about political revolutions.
If it's a matter of degree, it generally seems like alternatives to capitalism perform worse (world wars, Stalin murdering 16 million, Mao's five year plan). Capital is a rather decentralized form of power, and typically to make any of it, you must put your own assets, resources, or time at risk. Except in edge cases which might not really be capitalism (slavery, central banking e.g.) you also can't accrue more capital without at least exchanging for something someone else wants, making it non-zero-sum and distributive, which is not the case for say political power.
absolutely. "War is a Racket" is on my desk right now. But literally everything was terrible in the 20th century. Still yet, as a proportion of world population things in the 20th century were arguably better than before, and the sins of state-sponsored capitalism were vastly vastly smaller in magnitude than state-sponsored "alternatives-to-capitalism", without even taking credit for the huge swaths of population whose quality of life has risen from subsistence due to it. Would you rather have one Stalin or five x (US invasions of Haiti, Nicaragua, and Iraq)? I know which I pick, every time.
Moreover, in its idealized form, capitalism has less of the state, whereas in its ideal form, marxism/communism has strong involvement of the state, versus classical socialism/anarchism in the Proudhon/Benjamin Tucker sense. There's even an essay by Tucker from the 19th century where he predicts the rise of leninism, gulags, venezuela-like conditions etc, as a natural consequence of Marxism, long before they even happen.
It's interesting you mention World Wars in reference to alternative systems. "Merchants of Death", in the case of the US and capitalism, instantly comes to mind.
Otherwise, there are many contemporary examples of concentration of capital. Whether it is distributive isn't the question, but more the trends of distribution.
It's also quite interesting you mention central banks here, considering the substantial evidence of bulge bracket banks acting as an antithesis to your statement about risk (i.e "too big to fail").
The OP didn't say that it has to work perfectly to work. Capitalism just has to be better than the alternatives and society needs to do its best to fight back against the corruption and cronyism which corrupts it.
Too often people want to abandon markets and replace it with something that solves some of the problems but introduce tons of their own, instead of fixing obvious problems within the current system that was otherwise working well.
The better solution is a bunch of smaller experiments being run simultaneously in large economies (Ala at the state level) to see what works best. Instead of pretending we can have a one-size-fits-all best solution for the entire world.
>There's nothing inherently capitalist about corruption. It's a property of power, not capitalism.
That's the same argument that says "USSR/DDR/Cambodia/NK/etc was no real communism".
We might excuse a few diversions from a political/economic system, but after some point, like with anything else, capitalism is what capitalism does time and again.
Not sure this makes sense to me? There's corruption in every system, regardless of the ideology behind it. Are you saying there's no corruption in communism? Because I have news for you, if you do.
It seems like corruption is simply endemic to the human condition. It has nothing to do with capitalism/communism/etc. Whatever the system happens to be, we will find a way to corrupt it.
It doesn't appear to be what this person is saying. Rather, that we can't deflect from flaws in ideology having to do with the system in place, and the issues that stem from that.
Having said that, I find it to be rather unproductive and pessimistic to assert corruption is endemic to humanity and has nothing to do with ideology. Instead I would argue that the nature of the corruption has everything to do with the ideological foundations of said system.
> Having said that, I find it to be rather unproductive and pessimistic to assert corruption is endemic to humanity and has nothing to do with ideology. Instead I would argue that the nature of the corruption has everything to do with the ideological foundations of said system.
This kind of blank-slate, "New Soviet Man" idea has been tested and found lacking.
> Instead I would argue that the nature of the corruption has everything to do with the ideological foundations of said system.
How so? Is corruption different somehow depending on the ideological foundations of the system? Corruption is corruption. Every system has rules. When you subvert those rules for personal gain, that's corruption.
>How so? Is corruption different somehow depending on the ideological foundations of the system?
Of course.
Different systems enable, empower, and encourage, different types of corruption.
(Corruption being an abstract word, in programming terms there's no corruption "class", just corruption instances. So the nature of those corruption instances depend on the classes defined in the program -e.g. capitalism.c- you're running...).
(And of course share some basic corruption types, present in all societies/systems, e.g. theft -- the POSIX of corruption).
We've started the thread with concrete examples...
Check the @pjc50, @Traster etc comments at the top.
And @humanrebar already put this in abstract form: "It's worth noting that luminary capitalists like Adam Smith were very much concerned with privately enabled rent seekers in addition to government enabled ones"
> Check the @pjc50, @Traster etc comments at the top.
Those are specific examples of corruption here in the US. Are you asserting that you wouldn't be able to find the same corruption, for example, in China?
Please provide a single example of corruption that can occur under capitalism, but wouldn't occur under another economic system. Because I'm asserting they do not exist.
> And @humanrebar already put this in abstract form: "It's worth noting that luminary capitalists like Adam Smith were very much concerned with privately enabled rent seekers in addition to government enabled ones"
Yes, he was perfectly right to. There are always private parties. Even under communism.
>Not sure this makes sense to me? There's corruption in every system, regardless of the ideology behind it
I'm saying that some types of corruption are endemic to certain systems. And if we see these types of corruption time and again on a system, then the system enables that type of corruption.
>It seems like corruption is simply endemic to the human condition. It has nothing to do with capitalism/communism/etc. Whatever the system happens to be, we will find a way to corrupt it.
My argument wasn't about corruption in general (which we will always have under every system), but about a certain type of enterprise-related corruption, that can't be brushed away by "no true Scotsman/capitalism", as if 'truly adhering' to the ways of capitalism would eliminate it.
> a certain type of enterprise-related corruption, that can't be brushed away
If a system of government promotes X then there will appear X-related corruption. Capitalist governments promote enterprises, thus appears enterprise-related correction. Governments which promote the church will foster church-related corruption, etc. etc..
I don't see how this observation about capitalism is a particularly interesting one. Perhaps you could make some ground with "and capitalism uniquely allows this corruption to flourish on a scale never seen before" but that's not what I've seen in these kind of kneejerk criticisms.
Capitalist governments promote enterprises, thus appears enterprise-related correction. Governments which promote the church will foster church-related corruption, etc. etc..
Governments which are the party will promote party corruption. [looks at China] Yup. Checks out.
I wasn't making a no true capitalism argument. I was responding to the implicit straw man that ties capitalism to apathy or complicity about corruption. Capitalists care about private corruption. They always have. That's why there are laws and norms around fraud, nepotism, embezzling, and white collar crime in general.
Just because people are creative and invent new ways to be corrupt doesn't mean captilist societies are indifferent.
I would expect people skeptical towards corporations to see some common ground here.
It is. That's the whole point of having systems to regulate it. When those systems are overridden by, in effect, collective freeloaders, any system breaks down.
> We might excuse a few diversions from a political/economic system, but after some point, like with anything else, capitalism is what capitalism does time and again.
And by that standard, I'll take capitalism every day of the week:
It's worth noting that almost no traditional anti-capitalist or Communist argument relies on doubting the extensive evidence that widespread lifting from poverty is the result of capitalism and even fewer would disagree with the fact that such development has occured under capitalism. Marx famously declared that workers must be "doubly free": firstly free to sell their labour how they like, and secondly freed from the means of production and the products they make.
A good deal of research justifiably focuses on what life is actually like and the nature of exploitation in capitalist societies, and especially under neoliberalism. I'd point you to the work of D.K. Foley, Dumenil and Levy, Roberto Veneziani, Naoki Yoshihara, G.A. Cohen and John Roemer on those points.
Yes, perhaps Marxism was done a disservice by trying to impose it on agrarian, aristocratic civilizations like Russia and China instead of industrialized, capitalist civilizations like Germany and the United States. The history of Soviet industrialization under Stalin almost reads more like a Marxist caricature of industrial capitalism. And it was probably also done a disservice by the fact that when it was imposed on industrialized countries, it was done so at force and after significant devastation and confiscation of any remaining valuable industrial equipment (e.g. East Germany). However, it's also clear that 19th century industrial capitalism never really led to Marxist revolution.
The USSR never had communism. The official party line always was that it is a socialist state, on the way to communism. And once they reach full communism things will be really good.
Coldtea was referencing the very protestation you cited uncritically, so your comment added little to the conversation and appeared to be missing the point.
It was offical party line and tought in schools though. It was in school curriculum that USSR was a socialist system which should eventually lead to a communist society but it was not yet communism but more of a staging area which should lead there in the end.
Right, but the argument from the other side is that "real communism" can't be reached. It's a myth. What you get with the Soviets is the real communism.
That sort of ignores the actual theory of communism, but so far it's a pretty accurate assessment.
The point is that exploitation (of the people, the system, etc) for personal gain has nothing to do with capitalism, or socialism, or any other system.
Some people will do that in any system, it's human nature.
Now, in a system that has the rule of law you cannot be prevented to do something that isn't illegal. This is actually the best (or least bad) system we've come up with.
> Now, in a system that has the rule of law you cannot be prevented to do something that isn't illegal.
In a systme that has the rule of law, the lawmakers can choose to make certain behaviours legal if or when they harm the society. For example, private and corporate tax loopholes can be closed, and corrupt behavior can be outlawed or a liability instituted that the harmed party can claim.
It's childish not to blame capitalist governments for allowing certain kinds of corruption that are left to fester.
Capitalism cannot function without people exploiting the system for personal gain. If some CEO decided to stop trying to make as much money as possible but rather commit their resources to providing some sort of public good, they would be succinctly ousted by the board. Or their firm would tank, because companies that don't put profit first can't survive on the market.
Jeff Bezos can amass $100 billion in wealth and donate it to philanthropic causes, but if he decided to open source AWS or pay his workers a living wage, or pay publishers a reasonable price for books, etc, he wouldn't have $100 billion in the first place.
> Or their firm would tank, because companies that don't put profit first can't survive on the market.
I would argue that this is not strictly speaking true. There are successful companies which don't (seemingly) put profit first. Examples include Morning Star (tomatoes, not the newspaper)[1], Mondragon[2] and perhaps most co-operatives in general.
One aspect that is often overlooked is that it is necessary to balance the books. This is an universal requirement when resources aren't unlimited and it applies to physics, biology, and economics.
Capitalism very clearly and unapologetically forces this, while some people imagine that, somehow, that constraint does not apply in other systems.
> “Capitalism cannot function without people exploiting the system for personal gain.”
no, that’s too strong a claim. capitalism’s innovation is that it redirects greed into productive uses and allows personal gain in the process. so it explicitly accounts for our greed but doesn’t depend on it. it allows more pro-social forms of trade and competition as well.
the reason it seems so heartless/exploitative is that highly competitive markets push the competitors to extremes and money is used to keep score. and people cheat easily; some not to lose, some to win at all costs. (even in non-highly competitive markets this happens if status is highly sought by owners/execs)
I often wonder about this, and here’s my (u/dys)topian vision:
The top 5% of children in some measure of ideal traits for just ruling are whisked away to a bubble where they are educated for the purpose of governing, with no opportunity to ever rejoin the general populace. They have absolute power but no opportunity to benefit themselves or their families.
I'm saying a small number of people amassing a large amount of wealth through exploitation of the labor of others for personal gain is not what drives a socialist economy. Corruption and exploitation exists in all societies, but in capitalism it is a necessary element for the function to survive. There is no non-exploitative, fair capitalism.
Capitalism is the only system that limits the corruption. Unless the people are being forced to work/buy/sell with amazon, they are by definition not being exploited. Bezos is the richest person in the world because he provided a better service with a focus on long term profit. The world is different now because of it and people think its better because they are choosing to do it.
Bezos didn't build Amazon or AWS, his workers did. He contributed as CEO, but the work was done by thousands of smart, hard-working and talented people around the world, but they don't own the company. Bezos's salary is just $80,000 a year -- his wealth doesn't come from the work he does for Amazon but the fact that he is the one who owns the capital and reaps the profit.
That's correct, but why does he have the resources to do it? Because he came from a rich family with capital to invest. Why isn't capital distributed evenly across all workers, not just of Amazon, but in an entire society, so that everyone shares in the profits instead of one man? What is exceptional about the fact that he had the capital to make an initial investment, why does that mean he should be a billionaire? We invested collectively in the technology that created the internet in the first place through publicly funded research, and yet we do not see the material benefits, only a small few do.
What would it mean for capital to be distributed evenly? Under such a system, what would be the advantage for someone to save and invest rather than consume? (After all, on "turn 2", the capital is going to all be redistributed so it's even again. Then again on turn 3...)
Could you sketch out your idea a bit more? At the moment, I'm not getting it.
>Unless the people are being forced to work/buy/sell with amazon, they are by definition not being exploited.
"forced" can happen in more ways than one. Workers in third world sweatshops aren't forced by law to work there, but they are forced by capitalism to work there to feed their families.
Employees who freely take the best option available to them are not made better off if that option is removed.
I don't believe that Bezos or other employers are acting selfishly when them employ people, even when they make a margin on that labor. (In fact, if they don't make a margin on that labor, they would be better off to stop employing that person, meaning the situation where the employee and employer both make money on the deal is the most stable state.)
They are made better off if their wages are improved, ie if they organize and struggle for a minimum wage or a union. Employers will work their employees as much as possible for as little pay as possible, only the law and organized struggle prevents them from paying less. Capitalism encourages businesses to reduce their costs as much as possible, including labor costs, so obviously they will do anything they can to pay people less unless they fight back
fundamentally I'd like to believe these are exceptions to the rule. There are capitalists like this but they're a sort and don't represent the lot of us.
A key differentiator between the two is perhaps those that complain about capital gains tax effectively "taxing them twice".
oho, you are also the company?
Thats actually not the point they are making. They are saying that their income was taxed once when they made it, then after taking the risk of investing it in the market it is being taxed again if they earn a profit. It is still technically false but now that so many people see things like index funds as a sort of bank account it makes sense why they would feel they shouldnt be taxed again on it upon withdrawal.
Bank account interest is subject to income tax; brokerage accounts are only taxed on additional growth or dividends, and often at lower than income rates for stocks. So I'm confused why people would think that index fund income isn't taxed due to any similarity to bank accounts.
That's part of the deal of being a corporation. If you want pass-through taxation, that's what partnerships and LLCs are for. Of course, if you also want outside investors...
This is one of those instances where yes, of course it would be nice for you if you didn't have to give as much money to the government in taxes. But that's just not how it works.
fundamentally in a capitalist society that recognises no moral restraint on money and it's not illegal ... why not?
Capitalists are also concerned about conflicts of interest.
Anything less would be economically inefficient! /s)
Smart, far-seeing capitalists are able to see beyond mere legalities. Too much cronyism makes capitalism less efficient, because it starts to resemble centrally planned economies.
I understand with what you’re saying and agree that this can be useful, but it also amounts to a lawless “do whatever we want” attitude amongst highly privileged people that may run counter to democratic concerns. Wealthy people could say taxes are immoral and not pay them, which could lead to underfunding of schools and hospitals, for example.
> Smart, far-seeing capitalists are able to see beyond mere legalities. Too much cronyism makes capitalism less efficient, because it starts to resemble centrally planned economies
A smart, far-seeing capitalist realizes this is a collective action problem, and knows that there is no incentive not to practice cronyism as an individual.
They aren't choosing between having cronyism and not having cronyism... they are choosing between having cronyism and not participating or having cronyism and participating.
> Smart, far-seeing capitalists are able to see beyond mere legalities.
This is exactly the argument that Marxist made. They weren't going to let traditional middle class morality hold them back, they had history on their side and new what was ultimately best for society. They had real examples where trashing norms and moral codes ultimately worked for the best, such as overcoming a restriction on vivisection to cure a horrible disease. Or ignoring FDA regulations to get a helpful blood test to market. The argument can always be made. It just tends to end badly.
Arthur Koestler wrote about this a lot in Darkness in Noon.
No it's not. Smart, far-seeing people observe what's broken in the system, and many of them can fix it while making money. Then, there are people who don't care about externalities, and exploit the flaws while causing others harm. Sometimes outdated laws can be modified, or phased out.
The proposal of Marxists is that they take things away by force.
I take "seeing beyond legalities" to mean ignoring the law, not changing it of phasing it out. Ignoring the law is bad, even if you think you are doing it for a good reason.
Modifying the law or phasing out a law is fine and smart people companies should do that. I felt like the OP was saying that when you think a law is wrong you should ignore it.
> The proposal of Marxists is that they take things away by force.
Breaking a law in most cases is taking something away from someone or some entity, whether it is rights or property. It is bad to take something away by force. But it is bad to take it away by stealing or cheating too.
> The proposal of Marxists is that they take things away by force.
Capitalism is not possible without state application of force and coersion.
Consider land ownership, for instance. It is completely predicated on the use of force. The only reason you 'own' your land, is because someone a long time back used force to take it away from someone else (Or, if they were the original settler, used force to take it away from the commons).
"Ah, but now that we've divided all the land into various lots that people own, we can divorce ourselves from the original use of force! Going forward, we won't use violence to secure new ownership of land!"
Well, under Marxism, after a one-time use of force, whereupon productive property is transferred to the ownership of the state, it can also divorce itself from the original use of force. After all, going forward, it won't need to use force to seize productive property, either - because it will already have an owner - the state.
All ownership requires force. Ownership of personal property typically requires a continuous personal application of force. Ownership of private property (Land, productive enterprises, etc) requires a continuous application of state force.
The efficiency of the capitalistic system is not something a capitalist strives to optimise. It is the personal utility that is the main benchmark of success.
Actually, success in a capitalistic system is being able to withdraw yourself from the capitalistic system.
Why do you go to work? To make money. So that you, or your children, don't have to go to work, and can pursue personal interests that don't have one whit to do with capitalism.
This sounds like a comic book's description of economic structures where everything is black and white and there are no ifs or buts.
> Too much cronyism makes capitalism less efficient, because it starts to resemble centrally planned economies.
Can you give an example of 'central planning' in the modern world that wouldn't also apply to large businesses that operate at scale, like agribusinesses or mining?
This sounds like a comic book's description of economic structures where everything is black and white and there are no ifs or buts.
Maybe I should write economic tracts for socialists and ancap Libertarians.
Can you give an example of 'central planning' in the modern world
I've seen what happens when huge companies start to mandate that, "All new coding will be in Java. All databases will be on Oracle..." That never works. Everyone figures out a way to drag their feet and bring that to a halt. What does work? Doing something like mandating that all systems will be accessible over Webservices. That opens up resources within the company interacting in new ways as they see fit.
My grandfather was doing microlending in the early part of the 20th century, even when Korea was still occupied by Japan. Even people who are dirt poor can get their hands on enough capital to get the ball rolling. In many cases, Chinese immigrants start off poorer than the poor segments of the societies they move to, and yet have climbed into the middle and upper classes in a few generations. Often, this is done by pooling resources.
Look at history. The key ingredient isn't capital. Those who believe it is are precisely the ones who fail at capitalism. (Often they are the ones who take capital away from others by force, then see those industries fail and fade away.)
The vast majority of small businesses fail; wealthier people are more likely to start companies and more likely to succeed. (For some intuition, they can afford the float, on their living expenses, if nothing else, for longer, until they find market traction.)
Capital is indeed quintessential to capitalizing on market opportunities through business. It is in the name for a reason.
You make a sweeping and inaccurate statement that people who understand the dictionary definition of capitalism are all socialists who want to start a red revolution, which is just ludicrous and broadly offensive.
(The fact that I've revealed a truly remarkable bit of my family's history to you, for you to simply dismiss it, speaks volumes. You demonstrate no curiosity about it. It's simply something for you to "debunk." Just wow. Do you have any idea what my Korean grandfather had to accomplish within the Japanese occupied system to get into the position to microlend? Do you know what that meant for the farmers he was able to lend to? Do you have any clue what the North Korean communists who came into power would have made of all that? No curiosity about actual history, just partisan axe grinding. George Orwell was right about upper/middle class lefties. They don't care about helping the poor so much as about hurting the rich.)
The repeated climb of Chinese immigrants, going back over a thousand years, across different eras of history, in widely differing parts of the world, is not mere anecdote. If you include immigrants of other ethnicities, then the pattern becomes stronger, and the evidence mounts.
The vast majority of small businesses fail;
True. So one tries again.
wealthier people are more likely to start companies and more likely to succeed.
That's Pareto, not Capitalism.
Capital is indeed quintessential to capitalizing on market opportunities through business. It is in the name for a reason.
Yet time and time again, poor immigrants get themselves into the game and succeed, with little or modest access to capital. Contrast this with the numerous situations where industries are socialized, but into the hands of a different class/identity group, then proceed to decay. Capital is helpful, but isn't the key. Culture and knowledge are.
In this, there is hope, because culture and knowledge are transmissible.
I'm glad you're proud of your grandfather, but your emotional attachment to him does not strengthen an argument that capital is not required to start a business. I don't mean to be dismissive of his struggle in any way and I am aware that the Japanese occupation of Korea was atrocious.
> Contrast this with the numerous situations where industries are socialized, but into the hands of a different class/identity group, then proceed to decay.
Dude, I am not advocating socialism. You are repeatedly attempting to frame this as capitalism vs socialism and that is just not even related. I am pro-capitalism as much as I am pro-gravity but also pro-facts, truth, and realistic personal financial advice.
MG Rover: https://insolvencyandlaw.co.uk/why-didnt-insolvency-service-...
BHS: https://www.theguardian.com/business/2018/mar/27/philip-gree... / https://www.theguardian.com/business/2017/feb/28/philip-gree...
Maplin: https://www.taxresearch.org.uk/Blog/2018/02/28/40831/
(fundamentally in a capitalist society that recognises no moral restraint on money and it's not illegal ... why not? Surely you take as much money from the investors as you can and pocket exactly as much as you can get away with without being prosecuted? Anything less would be economically inefficient! /s)