| Has capitalism failed? | |
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| Oct 22, 2008 11:35 | #11   |
 | COOLSPRINGS WROTE: Seth, the private corps. once are qualified to the public means obtaining insurance coz it's funded by general public and big institution whose funding is from depositors. As a result, faith in Capitalism declines in public corp as you can see from the example of GM whose unioned workers earn 75 usd per hour (including benefits). How can they survive? What I like about some of these threads is that they make me think and do my homework to find out more about things than I originally knew. And this question -"has capitalism failed?" - really made me think. First off, I am not an economist, but I've taken courses in economics and like to think that I am reasonably intelligent (although maybe thats a mistake!). So what you'll get is my opinion, based hopefully on some facts and observations. I think people say "capitalism" without really understanding where it started and where it has come to in the USA. Probably the term "free enterprise" applies at this point, because so much has happened since early capitalism. China is experimenting with free enterprise and is doing very well, I believe. But China's free enterprise if fueled by people working for very low wages, compared to the rest of the world. So, what if all the Chinese workers decided to unionize (assuming they would be allowed to do that). Salaries would rise and China would be less competitive as a result. Important to note: unions are NOT part of capitalism, but grew out of capitalism as a way to get better wages for laborers. (TO BE CONTINUED IN NEXT POST) |
| Oct 22, 2008 11:37 | #12 |
| (CONTINUED FROM LAST POST) Now if unions go too far in their demands, salaries can grow to be too high for the intrinsic VALUE that they support. That is to say: with salaries too high, the basic cost for an item would exceed the price it could be sold for. Coolsprings' question is one I have asked myself before. If we pay a GM laborer $75 per hour, and the labor needed to produce cars makes the price too high to compete on the world market, GM will sell less cars and their profits will drop and their stock will drop. As Coolsprings asked: "how can they survive?". My answer is that they can't, unless something significant is done to change the situation. For example: 1. GM could negotiate lower salaries with the unions (but this is NOT likely to happen) 2. GM could move to more automation to require less labor and produce cars less expensively. But the unions would resist this, and eventually the union would probably go on strike. Sooner or later the unions would negotiate reduced numbers of workers and the strike would end. Maybe GM would then be more competitive for a while, but the cycle will keep repeating itself. 3. GM could use cheaper materials, but this would result in an inferior car, and people wouldn't buy it. 4. Another crazy idea is that GM engineers could come up with a radically new and better car that is really cheap to run and uses new technologies and materials! A car that is inexpensive to build and never breaks down! Now there is a possibile approach for how GM could survive! But based on Coolsprings' initial question: I believe that if nothing is done, GM can't survive. Ford is also having bad financial times for the same reasons as GM. Capitalism isn't really the issue, and PURE capitalism died a long time ago. Free enterprise will survive, because people always want and need things, and there will always be other people to make these things and exchange them for a value commodity (money, gold, diamonds?) with the people who want them. Isn't that essentially the basis for free enterprise as practiced in China? It sure looks like the USA is going through some hard times, and changes are needed for it to recover. Moving to too much government controls can make things a lot worse, since governments are notoriously inefficient in doing anything. Being just a spec of dust in the whole economic machine here, all I can do is hang on and hope for the best. |
| Oct 23, 2008 05:19 | #13 |
| I read this letter in the Times today. I thought it clarified a few points quite well. “To tell the truth, most Americans don't like socialism. As a conservative, allow me to offer my world views for your consideration, as it may clarify the typical conservative point of view. Hopefully, this will lead to less confusion and misunderstanding with my European friends. Most Americans agree that socialism is not a good idea. It's typically (though not universally) considered to be a pejorative in politics. "Socialism", to us, means that the government disproportionately takes money from the wealthy to redistribute to the poor to ensure a lifestyle for them. This is seen to be negative for two primary reasons. First, it's widely believed (at least by American conservatives), that any person can become wealthy by working hard and making good decisions. For this reason, wealth is a measure of success for many Americans. Socialism is viewed negatively because of the view that our "success" will be taken away by the government, and given to people that did not work as hard. Second, and concordantly, because of the upward mobility afforded by American Capitalism, the people who become "rich" typically are the ones who have made the best economic decisions. |
| Oct 23, 2008 05:20 | #14 |
| Good investments lead to good returns, and the cycle perpetuates. Because of this general perception, Americans value the efficiency and effectiveness of market based capitalism over socialism. Americans' general philosophy is that individuals that run successful enterprises are more adept at using their money to grow the economy than government, which is often plagued by inefficiency and bureaucracy. Additionally, Americans trust markets more than governments because incompetently run businesses in a market economy fail quickly because of competition, and are replaced by more effective business models, while an incompetently run government bureaucracy will run until the entire system collapses as long as the politicians that sponsor the entity feel that keeping the entity in place will preserve their power base. One example of this sad fact is the U.S. public school system, which ranks abysmally low due to lack of innovation and motivation through competition, while our competitive and privately run university system is the envy of the civilized world. An even better example of government inefficiency is one that the entire world is now being hurt by: the U.S. Housing market. The community reinvestment act passed by congress in the 1970's was given an overhaul during the Clinton Administration, and backed by congress, banks were encouraged (read: "forced") to loan money to individuals with less-than-stellar credit. This system was corrupted by activist groups such as A.C.O.R.N., who would use the legislation as reason to organize protests and lawsuits against banks that refused to offer mortgages to people. This led to an unnatural rise in the price of housing (because of the availability of credit), which led to a massive surge in home production, essentially creating the "housing bubble" in the market. Normal market forces would have caught this problem before it began. |
| Oct 23, 2008 05:23 | #15 |
| . Banks could never have lent money to many of the people that got loans, housing prices would never have escalated, and builders wouldn't have gone nuts trying to get in on all the easy money. Instead, government interference caused an economic catastrophe that's currently taking the entire global economy near collapse. Of course, good conservatives (which I would say constitute the majority, though not the whole of conservatives, in general) value social programs as well. Belief in the value of a free market also requires understanding that many people simply do not have the capital (whether monetary, or educational, etc.) to trade into the system in order to advance themselves. For this reason, conservatives highly value programs that help people who are less fortunate to reach their potential. Education is a biggie for most of us, since it's the investment that typically produces the greatest returns in terms of advancing an individual. That said, we conservatives don't particularly like programs that give entitlements with no requirements on behalf of the recipient. We don't like paying for other peoples' lifestyles after we've individually worked so hard to be able to afford our own lifestyles. While we're a people that value giving the needy a hand up, we would rather not give a hand-out. In conclusion, while many Europeans simply dismiss American elections as Republicans manipulating/stealing thhe vote to advance their own selfish ends, and most Europeans simply feel that Americans are too stupid to know the difference, I offer that we Americans know exactly what we're doing when we choose our leaders. The process is almost never pretty, but we're not stupid. We've just got different views about the role government should play in our lives. I hope this clarifies the conservative viewpoint, and provides an honest insight into our point of view” Dodger. |
| Oct 23, 2008 10:47 | #16 |
| Dodger - yes, that article really does clarify a lot of points, but doesn't explain why the American electorate is going to vote against its class interests and elect Obama. I still can't figure that one out. |
| Oct 23, 2008 21:12 | #17 |
| <<conservatives highly value programs that help people who are less fortunate to reach their potential. Education is a biggie for most of us, since it's the investment that typically produces the greatest returns in terms of advancing an individual. >> <<While we're a people that value giving the needy a hand up, we would rather not give a hand-out.>> Thanks Dodger for clarifying the superority of capitalism over socialism and the American Dream. In this liberty land, people know better than the rest of the world: They would be rewarded if they keep self improvment and diligent dedications and How to choose the government of the people, by the people and for the people. |
| Oct 23, 2008 21:28 | #18 |
| Seth, based on what the polls tell us Obama is over the line .Are these polls that accurate? I never get to see the questions asked, only the results. Any salesman worthy of the name knows how to ask the right questions to elicit the answers he needs to get positives out of someone. I have never been polled nor have I ever met anyone who has and I have no idea just how the pollsters operate, but they are in my opinion being used to manipulate the voters. “Why vote for a dead duck” is what they are saying. I think it’s a lot closer than the polls are telling us and my money is still on the old guy and the Moose. Dodger. |
| Oct 26, 2008 03:39 | #19 |
| GUEST1210 | “The financial crisis has exposed capitalism's darkest imperfections. But it is still the best hope we have of creating wealth and opportunity for the many”- Requote from Leonardo’s thread. “I've always thought of capitalism as the liberty to see an opportunity and profit from it.” ---Griz326 For those who thought “capitalism” as the best opportunity to create wealth, I suggest you think about a question futher: Is capitalism good for the poor? Allowing individuals to act unhampered by loose government regulations, capitalism has created unprecedented growth and prosperity. The key question is, workers create all the wealth under capitalism;a large portion of wealth is distributed to the wealthy. The ordinary workers benefits little from capitalism. Most workers who created the wealth stay poor. Capitalism might be the best opportunity to create wealth; wheras, it is far from an ideal system in terms of the redistribution of the social wealth. To address your concern, “has capitalism failed?” my answer is “NO”. Capitalism has its tumor. It is not terminal. Capitalism is good for the rich. |
| Oct 27, 2008 13:04 | #20 |
| Dodger - the polls are all over the place. Like the press, the polls seem to be making the attempt to influence people, rather than report on the situtation. Maybe it's just me, but it looks like the American people are rushing headlong to elect Obama out of hatred for Busch-Cheney. If they do this, I worry that Obama will bring unprecedented socialism and even Marxism to the USA. Already there are rumblings of restraining free speech (under the guise of being 'politically correct') and strong-arm tactics against any dissenting voices. I find this alarming. Most all polls show Obama ahead by a little or a lot, depending on how you interpret the numbers. But polls have been wrong, and McCain has survived before when everyone counted him out. Whatever wayit all turns out, I can't wait until it's over. All the rhetoric and lies and smears are getting on my nerves! |
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