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Capitalism's Fundamental Flaw

forbes.com

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Re: Capitalism's Fundamental Flaw

#91

Post by larryfreeman »

darjen wrote: post #30
larryfreeman wrote: post #25

Earlier quoted context omitted.

There's a fundamental flaw in your reasoning too. You can't have capitalism without some form of government and you can't have government without some form of taxation.

you can have voluntary, free trade without government. whether it's called "capitalism" or something else can be a matter of discussion...

Property rights need to be protected or an economic system falls into anarchy. On a small scale, it is possible for the community to enforce these rights (in which case, the community has formed a local government) but on the larger, societal scale, a transcommunity government is needed (or a warlord/city boss/etc appears which is, by its nature, a form of government).

If all free trade actions could be resolved by rational, respectful, interaction of two individuals of integrity (ie they keep their word), then no government is needed. As far as I can tell, if such a world existed, we wouldn't be having this discussion.

As long as individuals need to collaborate in order to resolve disagreements, as long as certain individuals need to take responsibilities for overseeing these collaborations, government is necessary.

Re: Capitalism's Fundamental Flaw

#92

Post by larryfreeman »

jriddycuz wrote: post #46
larryfreeman wrote: post #25

Earlier quoted context omitted.

There's a fundamental flaw in your reasoning too. You can't have capitalism without some form of government and you can't have government without some form of taxation.

Maybe the term capitalism has a different meaning to you than it does to me, but I use almost synonymously with "free markets." And I would actually make the case that you can only have "pure" free-markets without government. What I was suggesting in my comment above is that the failures of a bound and adulterated form of free markets do not indicate that free market principles are themselves flawed. The notion that…

I am unable to understand this viewpoint that you can only have "pure" free-markets without government.

There can be no free market without government unless you define government as "official" government. If you define government more loosely as a "governing body", then it is clear that government must always exist in a free market system because conflicts and disagreements will always exist.

The governing body is a necessary factor in economic system.

I would argue the free markets never exist in a 100% free state. To talk as if they do is really to ignore the realities and complexities of modern economic systems.

Re: Capitalism's Fundamental Flaw

#93

Post by Xichekolas »

moron4hire wrote: post #86
Xichekolas wrote: post #81

Earlier quoted context omitted.

I'm not trying to defend the current setup of the Federal Reserve as it stands... I think there is a lot of room to make it more transparent and to erect barriers such that Goldman executives (or any other bank) can't make a career of moving back and forth between the company, the Federal Reserve, and the White House. As you put it, the government has the ability to debase a currency (I'm not arguing it's fine to do…

"That is what commodity-based money gives you. Whoever produces or purchases that commodity has an effect on the money supply." But in that sense, nothing has changed for fiat currency. Fiat currencies are still produced and purchased just like commodities, with the exception that governments can produce all they want to get a leg up on that game. That's what they use monetary inflation for, to cheat at currency trad…

There is no reason it's illegal to make and circulate your own currency... my town even has it's own local currency.

To quote the section to which I think you are referring (Section 31 U.S.C. 5103):

"United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

Also Article 1, Section 8 of the Constitution:

"The Congress shall have Power...To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures"

Notice it doesn't say exclusive right.

The 'legal currency' just means that if you sell/loan someone something, and they offer to pay/repay in dollars, you either accept them or give up your claim to that debt. Also, the government will only accept dollars for taxes/fees. So you could legally refuse dollars if you wanted to, but if you did so, the other person could just say "I tried to pay but he wouldn't let me" and walk away. But if the other person wants to pay you in some other way... with Blah Bucks... and you accept them, nothing illegal happened. It would just be considered bartering.

I'm not sure I'd want a currency backed by my local bank. At least I know the US government and by extension the Federal Reserve can't go bankrupt, rendering my money worthless (although it's true they could hyperinflate, by choice). Imagine all the people that would have had Bear Stearns dollars and what a catastrophe that would have been.

Re: Capitalism's Fundamental Flaw

#94

Post by whopa »

gaius wrote: post #84
KirinDave wrote: post #68

Earlier quoted context omitted.

Such as the Theory of Relativity, or inventing the Internet, right? Too bad reality doesn't reflect your sentiment. Even solving a massive problem may not result in becoming rich. Especially with the way network economics has turned the whole scarcity model upside-down for modern internet-based startups.

What you consider "profit" depends on what you are trying to achieve. There are plenty of billionaires who'll be forgotten but in 500 years people will talk about Einstein like we talk about Newton, and about Tim Berner-Lee like we talk about Da Vinci.

But one of the points of the article was that people who have the potential to be the next Einstein or Berners-Lee are disincentivized to pursue that potential, and instead follow a path that makes more money, but doesn't add value to society.

Re: Capitalism's Fundamental Flaw

#95

Post by darjen »

larryfreeman wrote: post #91
darjen wrote: post #30

Earlier quoted context omitted.

you can have voluntary, free trade without government. whether it's called "capitalism" or something else can be a matter of discussion...

Property rights need to be protected or an economic system falls into anarchy. On a small scale, it is possible for the community to enforce these rights (in which case, the community has formed a local government) but on the larger, societal scale, a transcommunity government is needed (or a warlord/city boss/etc appears which is, by its nature, a form of government). If all free trade actions could be resolved by r…

my question is can property rights be adequately protected by government? seems like history has proven that not to be the case.

the assumption that warlords would always appear in society no matter what is just that - an assumption. on the other hand, every government we have today was born by conquest and initially created by warlords.

I simply don't hold to the assumption that government will always be necessary in society to protect property rights. they are actually the biggest violators we have of property rights. people are capable of progressing beyond government, and I think they will once they finally realize what government really is.

Re: Capitalism's Fundamental Flaw

#96

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