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Capitalism Has Gone Off the Rails

spiegel.de

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Re: Capitalism Has Gone Off the Rails

#101

Post by jvm »

jacquesm wrote: post #68
jvm wrote: post #21

There's a lot of conflation in this article between distribution and economic growth, which I think arises from the Spiegel's European perspective. Going back to the start of the DAX tracking (mid-2011), we see okay performance in German DAX index, stagnation for the French CAC and British FTSE, and strong performance in the US S&P 500 and Japanese Nikkei. [1] Eurozone unemployment has soared into double digits of la…

> The economic situation in Europe is truly awful, in contrast to the US and Japan where growth has been respectable. That depends very much on where you're looking. Spain or Germany are worlds apart in this respect.

They certainly are. But even Germany has had mediocre performance compared to the rest of the rich world.

Re: Capitalism Has Gone Off the Rails

#102

Post by simonh »

curiouscats wrote: post #46
RangerScience wrote: post #8

Earlier quoted context omitted.

Yeah. I'm, to a decent degree, a fan of calling what we have today "corporatism" rather than "capitalism".

Yes. Many of the problems today have nothing to with capitalism but with government policies that are largely aimed at making those with the gold happy. Capitalism is mainly about having markets that have competition. NO organization is suppose to have market power. This isn't really possible, but that is the concept. And we are so hugely away from it we can't call what is going on now capitalism. We have allowed peo…

I agree with your point that capitalism is about markets, technically markets for capital, but markets for goods and services are also very important for a high functioning economy. We have those. To demonstrate this, let's looks at some alternative models such as those in Russia and the Chinese domestic markets, and contrats those with the west.

The Chinese and Russian ssytems are very corporatist. In both cases huge corporations completely dominate the domestic economy. In Russia's case these are technically privately held, but the oligrachs are so closely tied to the political ruling elite that this realy is just a technicality. In China the major corporations are owned by the government and explicity run by government place-men. In both cases these corporations enjoy economic, financial and political patronage and privillege that makes it functionally impossible fror 'independent' corporations, companies or individuals to effectively compete with them.

You might argue we have a similar ssytem in the west, but we realy don't. es there are instances of political patronage. Yes there are cases of undue political influence by corporations through lobbying. However the scale of such cases is absolutely riny and marginal compared to the standard order of business in Russia and China. There just isn't any reasonable comparrison. The rule of law, vita to the funcitoning of viable markets, it'sn just weak in China and Russia, it's functionally nonexistent.

No matter what weaknesses and flaws you can pick at in the rule of law in the US or Europe, the difference compared to China and Russia is several orders of magnitude.

Could our system(s) be better? Yes, of course. Is the situation gettign worse? In some ways yes. Are we in the same boat as Russia and China? No, not by any reasonable measure.

Re: Capitalism Has Gone Off the Rails

#103

Post by rattray »

yummyfajitas wrote: post #91
zanny wrote: post #75

Earlier quoted context omitted.

There is tremendous long run psychological and physical harm associated with living paycheck to paycheck in perpetual debt having to eat subpar foodstuffs because fruits and vegetables cost way more than dollar menu cheeseburgers per calorie. And if you don't have a working kitchen you can't cook farmers market produce. And that is at best. A lot of us are unemployed, and families are collapsing in on themselves as y…

There is tremendous long run psychological and physical harm associated with living paycheck to paycheck This is entirely in the control of most poor Americans. India's GDP/capita is $5500 after adjusting for cost of living, yet India has a 20% savings rate. Poor Americans could reduce consumption and save if they wished. in perpetual debt having to eat subpar foodstuffs because fruits and vegetables cost way more th…

I've been traveling in SE Asia for the past 4 months, including China (not yet India). I've been in urban slums and poor rural villages. I also went to university in West Philadelphia, so I've spent a bit of time in an American "inner city".

I'd take the rural village or even the urban slum over the American inner city any day.

It might look from the outside that life "is entirely in the control of most poor Americans". But nothing could be further from the truth. The amount of forces conspiring against you as a student or young would-be worker in the ghetto is simply unfathomable to anyone with a middle-class or wealthier background (like myself). I'd argue you have a much better chance at moving up in the world as a poor person in Vietnam than America. There, you start a small business (eg; selling goods on the street) and work hard to grow it. Here, you can't just do that: people don't buy anything off the street. And don't tell me "they can just learn to code": I tried to teach them. They don't have computers. Not in the schools. Not at home.

Also, consider that unhealthy foods are often genuinely addicting and addictions are really, really hard to break. Especially when you're stretched then.

I don't want this to turn into a rant, so I'll just say that before you start blaming the American poor for their problems, spend some time living there, talking to them, and understanding their problems.

Re: Capitalism Has Gone Off the Rails

#104

Post by rattray »

yummyfajitas wrote: post #50
psychometry wrote: post #33

Earlier quoted context omitted.

A third of the population in the richest nation on earth lives in poverty. According to you, that's not a problem because even poorer people in Bangladesh are slightly less poor than they would be if American companies had never employed them. What kind of callous person could look around at all the suffering and think this system's working great? Or do you not look around at all, holed up in a tacky mansion of your…

95% of the biggest nation in the world (or maybe second biggest, no one really knows the exact pop of India and China) lives in far deeper poverty than poor americans. Many of them experience actual suffering - not enough food, no flush toilet, no power. What, precisely, do you believe poor Americans are suffering from? The only concrete answer I usually hear is envy (I.e. "oh noes the inequality"). http://economix.b…

> The only concrete answer I usually hear is envy

Then I don't think you've really been listening. Their lives are extremely unpleasant. Spend some time in a poor neighborhood in America, talking to people. I haven't read it but the book On the Run by Alice Goffman might paint some helpful vignettes.

Re: Capitalism Has Gone Off the Rails

#105

Post by james1071 »

Animats wrote: post #17

This is an important article, but I doubt there will be a useful discussion of it here. The developed world has incredible productive capacity. With 1% of the workforce in agriculture and 8% in manufacturing, the US produces as much stuff as China. There are no significant shortages of any manufactured good anywhere in the developed world. Quality is pretty good across the board, too. This is unique in history. That'…

There is more than one thing going on.

Balance sheet recession. Mistaken policy response-austerity, German unhelpfulness in Eurozone. Globalization-i.e. cheap labour Automation Financial industry acting against interests of wider economy.

Re: Capitalism Has Gone Off the Rails

#106

Post by rattray »

RangerScience wrote: post #8
dnautics wrote: post #4

Earlier quoted context omitted.

Note that what Iceland did and the idea of clearing out bad capital and malinvestment are actually capitalist ideas, versus, say bailouts and central bank manipulation, which are not.

Yeah. I'm, to a decent degree, a fan of calling what we have today "corporatism" rather than "capitalism".

Pedantic, but it's actually "Corporate Capitalism"[1]. "Corporatism"[2] is a bit different. (My Economic History professor tells me it was a system dominant sometime around the Middle Ages in Europe, in which guilds directly provided many of the services we now associate with governments. Which before that had not existed; there were only Feudal Lords and their subjects. But, it seems it all depends on who you ask, and my memory may be hazy on the specifics).

[1] http://en.wikipedia.org/wiki/Corporate_capitalism [2] http://en.wikipedia.org/wiki/Corporatism

Re: Capitalism Has Gone Off the Rails

#107

Post by yummyfajitas »

rattray wrote: post #103
yummyfajitas wrote: post #91

Earlier quoted context omitted.

There is tremendous long run psychological and physical harm associated with living paycheck to paycheck This is entirely in the control of most poor Americans. India's GDP/capita is $5500 after adjusting for cost of living, yet India has a 20% savings rate. Poor Americans could reduce consumption and save if they wished. in perpetual debt having to eat subpar foodstuffs because fruits and vegetables cost way more th…

I've been traveling in SE Asia for the past 4 months, including China (not yet India). I've been in urban slums and poor rural villages. I also went to university in West Philadelphia, so I've spent a bit of time in an American "inner city". I'd take the rural village or even the urban slum over the American inner city any day. It might look from the outside that life "is entirely in the control of most poor American…

I'd argue you have a much better chance at moving up in the world as a poor person in Vietnam than America.

Your argument would be wrong, at least as of the last time we ran this experiment. Back in the 80's we took a bunch of Vietnamese and turned them into poor Americans. Now they are not poor. In contrast, the Vietnamese who stayed behind are still very poor. That includes the ones who started small businesses like selling goods on the street.

http://en.wikipedia.org/wiki/Vietnamese_American#Socioeconom...

Re: Capitalism Has Gone Off the Rails

#108

Post by slgeorge »

jvm wrote: post #101
jacquesm wrote: post #68

Earlier quoted context omitted.

> The economic situation in Europe is truly awful, in contrast to the US and Japan where growth has been respectable. That depends very much on where you're looking. Spain or Germany are worlds apart in this respect.

They certainly are. But even Germany has had mediocre performance compared to the rest of the rich world.

Your meta comment is probably the most informed one I've read in this discussion.

One aspect worth considering is _why_ the article is representing such a different perspective to the perspective USA readers would consider "sensible".

A reasonable answer on the growth side is that Germany's perspective is not solely focused on GDP, other factors such as employment and wage growth are important. On the stimulus side the German central banking system has always been hawkish (possibly due to their history) and this has continued to a large degree with the ECB.

Re: Capitalism Has Gone Off the Rails

#109

Post by tsotha »

psychometry wrote: post #33
mattmcknight wrote: post #27

Earlier quoted context omitted.

This is not an important article, it is a rant against people with "tacky mansions", a turn of phrase that is more indicative of the author's point of view than the other conventional points about not understanding creative destruction. I think it is this overly nationalist view of economics that needs to die, not "capitalism". There is not less productive work to go around, it's just not being done in the US. We are…

A third of the population in the richest nation on earth lives in poverty. According to you, that's not a problem because even poorer people in Bangladesh are slightly less poor than they would be if American companies had never employed them. What kind of callous person could look around at all the suffering and think this system's working great? Or do you not look around at all, holed up in a tacky mansion of your…

Poverty is a relative thing. Very few actual poor people would recognize American "poverty" as such.

Re: Capitalism Has Gone Off the Rails

#110

Post by pilsetnieks »

wooter wrote: post #92
zanny wrote: post #75

Earlier quoted context omitted.

There is tremendous long run psychological and physical harm associated with living paycheck to paycheck in perpetual debt having to eat subpar foodstuffs because fruits and vegetables cost way more than dollar menu cheeseburgers per calorie. And if you don't have a working kitchen you can't cook farmers market produce. And that is at best. A lot of us are unemployed, and families are collapsing in on themselves as y…

> subpar foodstuffs because fruits and vegetables cost way more than dollar menu cheeseburgers per calorie. what? not even remotely true. i frequently buy 6 lb bags of frozen broccoli/cauliflower/carrot for 8 bucks. There is cheap, healthy food out there, some people just aren't buying it.

> 6 lb bags of frozen broccoli/cauliflower/carrot for 8 bucks

That implies access to a working freezer, electricity, and transportation to drive out to Costco or wherever; things that are nowhere near granted for everyone.

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