The end is near!

In theory, I agree with you. In practice, throughout history, it seems that wealth and property gradually makes its way to the top [like cream, and scum] until a small group of elites live in luxury and lord it over the rest of the people living at a subsistance level -- all their own fault, of course. It is difficult to defend this as moral. Then one day the many get angry enough to realize they can overthrow the few, and the system collapses and starts all over again. Whenever you hear someone complain, "That's just class warfare," it usually comes from a member of the upper class. The upper class is continually engaged in class warfare, although they probably call it competition or free trade. The world doesn't need more rich people, it needs fewer poor people. Socialism has failed to do this, and so has the winner-take-all monopoly crony capitalism as currently practiced. I have no suggested solution to this dilemma. It's just an observation.

 

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Like Democracy, I find capitalism to be the worst possible solution except for every other one that has been attempted.

 

As the standard of living for the poor is raised the standard defining poor increases accordingly.

 

That's true. But in the Dark Ages, even serfs were self sufficient. Now, there are many people who would probably die without government aid. They can be blamed for their own perdicament, but they will die nonetheless.

 

I agree, but apparently it's going to fail anyway.

Edit: I should qualify this. By "fail" I mean fail in its intent to facilitate the production and distribution of goods and services in a manner that optimizes the standard of living for the vast majority of people. I'm not among the believers in the collapse of civilization.

 

Lol, show me one country on earth that actually practices capitalism. Just one.

The problem, in my eyes, is that all countries are socialist, its only a matter of degree. As such, all attempt to tax the wealth generated by capitalism to fund their socialist ideals, and redistribute wealth based upon politically powerful entities.

Governments "put up" with capitalism simply because it funds their socialist spending. All of them do it, so I am not saying who is better than anyone else.

 

Then lets assume for a moment that there was no socialism. The advances in technology and manufacturing have brought the world to a point where all of the capital in the world can be employed to produce all of the goods that are needed by society without having to employ everyone. So we have structural unemployment. So what happens when technology advances some more and only half the people are needed to work? What happens when only 10% of the people are needed to work? I know there is supposed to be a service economy where the unneeded people go to work to cut each other's hair and polish each others nails, and maybe lawn services can start to cut lawns daily to employ more people, but that only works to a limited extent. So under 21st century capitalism, if such a thing existed, there would be masses of people with no income and no prospects for productive work.

 

Geez Cloud, I never would have guessed you are a "there are only a limited number of jobs in the world possible" kind of guy. Your assumption that structural unemployment would happen is your flawed assumption. This DOES happen, but it is the result of socialistic policies on minimum wages, work hours, and the like. This is why Europe is so heavily mechanized, its simply way too hard and expensive to actually hire employees. Take away these job killing regulations, and you would have full employment save for those who refuse to work.

 

However, we have that existing in our society right now. How many people you know, or live in your community, are collecting public assistance, or welfare as many know it as, for more than 5, or 10 years, even longer? I have classmates, who strived for nothing better than a welfare check, foodstamps, medicaid and getting their rent paid by hard working taxpayers. Many of them know of nothing else as their parents did the same, stayed at home while the tax dollars paid their way.

Would they not be considered having no income and/or no prospects for productive work? They receive only the bare necessaties FOR the necessaties, and our Government seems to be okay with this as they continually increase the state aid which funds the county PA budgets to continue paying for these people to do nothing.

Think back to the depression years of the 30s. Roosevelt could have asked Congress to pass needed legislation for funding unemployment compensation for the millions out of work because of the economy tanking. However, he(Roosevelt) saw this would be an inaffective measure only to make matters worse, as did his predecessor Herbert Hoover, POTUS when the financial markets crashed in 1929.

Instead, Roosevelt invested in the economy by creating jobs to put Americans back to work. By 1935, the unemployment rate, though still high by today's standards, was cut nearly in half.

It's highly possible that by Government keeping the dole going out regularly this is playing a part in keeping the lower class, or poverty level people where they are BECAUSE of the dole.

 

I suppose that if all socialistic policies on work and welfare disappeared, the "poor" would have to work for whatever wage they could get. Nobody in NJ can raise a family on minimum wage, so forget about 1/2 or 1/4 minimum wage. Of course, housing would be abandoned as even modest apartments would be unaffordable, and third world type slums built from construction debris would suffice. And people could supplement their wages and hunger with crime.

When David Ricardo postulated his theory of comparative advantage, the standard of living among the countries he discussed was comparable, and this made free trade feasible. Now we are in a situation where China and its neighbors have a low enough labor cost that they possess an absolute cost advantage in everything if you assume no government interference in the transfer of capital or technology. And as they move their population into the workforce, they will be able to produce nearly every manufactured good consumed in the world at a lower cost than everyone else. If free market capitalism persists, it’s game over for the middle class people in the West and all standards of living will have to fall [or “harmonize” as the globalists like to say] to the level of China. So oddly enough, capitalism might redistribute the wealth faster than socialism ever could.

It’s ironic that those job killing regulations might be the only thing saving the jobs. And I'm not so sure life was better when there was no minimum wage, no limit to work hours, no child labor laws, and no job killing safety regulations. I think you underestimate the downside of unfettered capitalism. Henry Ford is said to have raised the wages of his employees so they could purchase the cars they made. I'm afraid there are no Henry Fords anymore, and morality is a quaint ideal of a bygone era. Today's elite are out to secure the wealth of the world. I think Atlantic magazine did an article a couple of years ago on the attitudes of the wealthy toward the rest of society by interviewing many of them. The results were disturbing.

 

I don't disagree with your post, in theory, and I said I have no solution. But I would expect a mass die-off if all government assistance and regulation of the economy ceased all at once. Certainly many of these people could support themselves if forced to do it, but just as certainly, many could not.

 

There better not be any gun & ammo auctions

 

I believe that an absolute of either system is flawed. It seems like there was a period in the 80's of leaning on complete capitalism which actually ended up hurting the economy.

The problem that I see with modern day capitalism is our advancements in technology. Capitalism is a profit based system which relies on profits to function.

In the world of profit maximization and computer technology we have cut down on the work force and we will continue to cut down on the workforce. With fewer workers and less money to be spent on goods, the sum of all goods is not being sold.

It seems as though in the past we traded excessive goods to 3rd world countries in exchange for raw materials. That is not flying anymore. I guess what I'm getting at is that technology is leading to less and less jobs, and excessive amount of goods, and nowhere for them to go.

I'm kind of hoping that someone will respond to this because what I just said might be dead wrong. Just brainstorming here.

BTW I'm not trying to defend socialism here.

 

They must be ice skating in Hades today as I completely agree with everything you have posted in this topic today including this summary. But there is a chapter 2 to this.

What is being done in your post is coming at the expense of consuming the resources of 7-8 earths in order to mechanize and produce this level of production. It's made possible with resource allocations being determined by global finance which by its very nature, has to constantly expand. There is no stop button and no reverse gear. With no limits to exploited resources, population also grows beyond what is supportable and hence there is no work. But it doesn't last. At some point the resource supply chain collapses and people are back to having jobs in order to survive.

 

Let's see, well Henry Ford coubled his workers pay to $5 a day but MORE than doubled the speed of his line. His workers worked harder, therefor were worth more, therefor got paid more. Henry Ford was no worker savior, he was a businessman.

You stating that no one could afford NJ, well that is because housing and the like is priced today with trillions of dollars in public assistance assumed. Without this money jacking up the prices of land, maybe an apartment costing $800 a month today would only cost $200 a month. There is no way of knowing what you are claiming knowledge of Cloud. Is the price of an apartment in poorer countries the same as NJ? Why not? Because they are priced at what the population can AFFORD. Trust me, landlords would not have 500 empty apartments, they would lower rent until people could afford it. Land prices would fall until people could afford houses. Real Estate is a function of local incomes, and take away public assistance, and local incomes fall, so rents fall.

Btw, comparative advantage has nothing to do with similar incomes. Heck, I taught it using an example where one country could produce every single thing cheaper than the other, but comparative advantage STILL led to higher consumption in both countries. I think you need to go read this theory again, I don't think you are getting it.

 

You should get away from linking public assistance under the income title, because I don't see it as income. It's not earned. These people don't work for their welfare, although state and county Government should make them work for it. Income, as I see it, is what you earn from working a job.

But I do agree with what you say on the housing market as a whole.

 

Gallon of gasoline myself. Gonna get that bunker emptied for sure.

 

With the apartment example, I was just pointing out that the repeal of labor laws might [and I think it's a high probability] result in a deflationary depression of breathtaking proportions to make some basic necessities affordable. I don't consider this desirable so the free market crowd better think this through in case their side wins.

Regarding comparative advantage, you missed the point that not only can China produce every single thing cheaper, they can produce all things simultaneously cheaper in amounts beyond current demand if necessary because of the huge untapped labor force and enormous investment capital. Work that into your formula and it invalidates comparative advantage. This situation has never existed in history before. Should China concentrate on producing electronics and let the US produce, say, cars? No thanks because China can produce more of both, cheaper, and in quantities far greater than current world demand if required. Think about that the next time someone says they favor free trade.

 

I'm not convinced that the use of resources is a problem [yet]. After all, if something isn't being used, it isn't really a resource. And anything can become a resource if someone figures out a use for it. Flint is just a rock until someone figures out it can make a good blade, and a landfill is just wasted space until someone figures out how to extract energy from it, and natural gas was just flared until someone figured out how to pipe it to electric plants and consumers. I agree that the current rate of usage of current resources is unsustainable, but the world has always figured out a way to come up with new resources and there is every reason to believe it will happen again. People are very clever about solving needs.

 

Hello

That is not a good interpretation of history. There wasn't even wide spread food security until the early 20th century. People died young, and from painful deaths, plagues and this reality affected the view of warfare. Humanity was miserable.