It coerces all working people all the time, and brainwashes everyone else through its control of the media, while telling its serfs how free they are.
It destroys all notion of the optimal sized firm, encouraging greater market power (and the rent seeking it generates) Hierarchy supporting division of labour criteria isn't a problem. Indeed, given transaction cost problems associated with the market, its often a jolly good thing. The problem is that, within capitalism, hierarchy also has the role of maximising economic rents (that's not necessarily a "managers are evil" concept as it can just be about controlling shirking within the workforce). Steeper hierarchy and therefore greater market concentration in the long term. You have to include some form of agency problem, else efficient market analysis will drive out the short term profit incentive for something akin to maximising long term return. As long as government power is avoided (creating influence costs), such that its role is only about aiding the analysis into the distinction between private and social return
It depends on the nature of the crisis, how do they fit in the longer story of human wealth accumulation and pursuit of happiness. If unemployment was caused by a technology shock then we have a greater pie ahead despite temporary sufferings. If crisis were part of unecessary risk taking by Economics agents then bankruptcy laws would teach them a good lesson. We learn and improve based on past experience and mistakes are necessary lessons.
Is it not in today's economy, that taxes, over-regulation, political control of the economy the factor causing unemployment.
Nope! Take, for example, hysteresis in unemployment. We get a supply side shock having long term consequences and actually economic planning, via the government, as a means to minimise the problem. You can go further. Heterodox types, for example, will actually see government 'waste' as a rather important result (as it can be used to minimise the chances of macroeconomic damage created through monopoly power)
Cyclical unemployment is still better than Soviet full employment. Not all cycles are the same but the Tech bubble in 2001 and 2008 housing crash were pretty good examples of low interest rate induced Austrian school Boom Bust cycle, thanks to the government agency Federal Reserve. And back to the question you cannot discuss unemployment without discussing the underlying reasons. Asset price deflation and unemployment followed by the failure of bad investment were part of a healthy market re-adjustment, not the problems itself.
I am not schooled in economics at the least thus the terminology you use would take a lot of google searching and reading to come to a clear understanding, can you state that in laymen terms. Not baiting, just saying my education is technical/scientific not economics.
You would be wasting your time. Reiver dwells in the theoretical world. He has only convinced himself that it is just like the real world.
Why are you referring to the state capitalists? There's no support for them from me! The correct distinction is voluntary versus involuntary unemployment; its the latter which the profit motive in capitalism harvests What do you make of the efficiency wage hypothesis?
Hysteresis is a scientific term, merely applied to economics. It refers to the time dependency in unemployment. What we get is a downturn can have long term negative effects as unemployment is ratcheted up (i.e. without the government minimising the severity of the downturn, we get an increase in long term unemployment). My reference to heterodox economics is a reference to the likes of post-Keynesianism and Marxism. As we combine those approaches we understand why supply and demand forces don't encourage a comfortable result. For example, consider cost-plus pricing where a firm has market power such that it chooses a simple pricing rule: cover costs and make a certain % profit (rather than be restricted to the notion of a 'market price'). What happens in a downturn? The firm, starved of demand for its product, can actually increase price (leading to stagflationary problems).
Do not forget the scores of other economic approaches such as evolutionary economics, behavioral economics, econo-psyhics, and complexity economics. Marxian and post-Keynesian economics are simply two popular schools of heterodox economic analysis, but they are not the only ones.
I guess I worded that incorrectly. But I disagree with "the main advantage of socialism is the increase in productivity". The advantage of socialism is not that it can produce more, it's that it allocates production rationally. A socialist economy theoretically could produce more since it would probably be more centralized and the different economic units (specifically the socialist equivalent of the firm, whatever form it takes in this hypothetical socialist economy) would be more of less in cooperative relations with one another thus not wasting resources of competition. But in reality I suspect a socialist economy would produce less, because under socialism where products would be rationally designed to fulfill use-values for the longest time possible and at the least cost, planned obsolescence would be a thing of the past - you wouldn't need to buy things as regularly because they would be designed to last instead of just breaking to stimulate capitalist demand.
I do not see efficient wages as a counter-arguement against capitalism. Given its premises and implication, unemployment is nothing but a cost incurred to overcome the problem of incomplete contracts due to possibility of workers shirking. We could say that without unemployment, we would have market failure and only a wage for unmotivated workers exist. If technology improves that a more complete contract is possible the situation might change. I see all these beauty of human actions as parts of our innovation towards greater efficiency and output, and no reason to blame the medicine for its side effects.
My problems with keynesians in general is that they ceased to be economists by their obsessions with "special cases" that happened to be time, location and knowledge specific. Economists are supposed to deal with timeless laws and principles central to the logic of human actions (though less hard than natural sciences), but not playing the role of speculators. Keynesians do provide key insights on how things could go wrong in certain situations under certain assumptions, but it is really a way of thought than a school of thought, from fiscal advocate like Keynes to modern day Post-Keynesian debt hawks like Steve Keens. They do not have a distinct patterns of logic and assumptions like Neoclassicals and Austrians and hence they are at best interesting intellectuals but not strictly Economists.
"comfortable result" being defined as the results you imagine would occur in a theoretical world of perfect competition.
But that is one explanation for the increase in productivity. There is an understanding that, unlike the basic approach used in perfect competition and pareto efficiency where equity concerns typically go hand in hand with losses in efficiency, there is a positive relationship between equity and efficiency. Centralisation, except for economic development, cannot hypothetically produce more. We'd be back to the socialist calculation debate and acknowledgement of the costs associated with distributed knowledge (such that the economic planner will make drastic error). The production gain comes from worker ownership. Planning within the firm improves.
It certainly delivers an outcome inconsistent with the pro-capitalist cheer leaders: that the profit motive guarantees mass unemployment, such that the whole notion of the production possibility frontier is inconsistent with the nature of capitalism. I'd suggest that you be careful with the contracting comment. The hypothesis is certainly multifaceted. The labour turnover model is the approach closest to the standard imperfect contracting outcome. Shirking is more complex than that as the unemployed themselves serve a key role: ensuring worker compliance. That's a key difference. So with labour turnover we have a simple market failure (and unemployment is an unfortunate repercussion), with the shirking model we're instead focused on employer-employee conflict and unemployment enabling profit maximisation within that environment
Homo sapiens may be interpreted as meaning that only High IQs have evolved into this species. They created everything that prevents the unevolved humans from living like animals, so the rest are animals. High IQs also created all the world's wealth, but have it stolen from them by the King Apes, who rule by force, aggression, and intimidation. The herds of lower IQs may support their self-declared leaders out of jealousy and hatred towards the real wealth producers. The unevolved feel more comfortable in a mindless world ruled by physical force.
Its about the rejection of supply & demand. You may not find that an important outcome, given you don't do economics, but I'd find that a 'crikey' moment
???? "rejection"? You seem to have an incredibly tight embrace of supply and demand. Almost every criticism of capitalism you have seems to be in it's failure to perform as supply and demand should perform in a hypothetical world of perfect competition.
I support capitalism because I want myself, and others, to be able to achieve full potential with our ideas and innovations and business. As a consumer I enjoy the competitive spirit and the survival of the fittest because it brings me more options in life and better pricing. Where we get into trouble in society is believing that capitalism will always provide jobs and prosperity and tax revenues which will grow in perpetuity ahead of the demands of the people and government. And since I believe society and government and the economy are separate entities, each benefitting the other, there can be no guarantees that the private economy will always provide everything people and government need. Today this is further exacerbated because we operate in a global marketplace. And this brings me to the problem area; people and government do a very poor job being prepared for economic downturns. We know today that the long-term economy is going to fluctuate up and down for myriad reasons, and we know these fluctuations might require years to begin and end, yet people and government ignore these facts and manage themselves assuming a steady diet of positive growth...and this is stupid...
I just understand a little economics. Is cost-plus pricing a rejection of supply and demand? Yep. Is the post-Keynesian analysis into wage determination a rejection of labour supply and demand analysis? Yep. The problem is that you don't understand the basics. Perfect competition is used as a hypothetical market structure to help understand actual markets (such as assessing the well-being effects from monopoly power). I've been referring to something quite different. Do we need perfect competition to deliver the fully employment result? Nope! However, we do have a rejection of the invisible hand such that the selfish motive is inherently based on an inefficient outcome of mass unemployment
