free-market capitalism

Discussion in 'Economics & Trade' started by bricklayer, Jan 7, 2020.

  1. bricklayer

    bricklayer Well-Known Member Past Donor

    Joined:
    Jan 12, 2011
    Messages:
    8,898
    Likes Received:
    2,741
    Trophy Points:
    113
    Capitalism - An economic system controlled by price moves.

    Free-market - A market in which individuals act according to their own self interests to the benefit of others.

    Free-market capitalism is an economic system controlled by price moves that reflect individuals acting in their own self interests to the benefit of others.

    Anyone familiar with Dr. Thomas Sowell will already be familiar with the above definitions.
    Dr. Sowell first established the above nomenclature, in his most widely distributed book, "Basic Economics". Although an economist, Dr. Sowell never exclusively focused another book on economics (and he's written over two dozen very important books).
    When asked why he never wrote a book on advanced economics he stated that, "There are no advanced economics. Economics are basic; economies are complicated."

    Free-market capitalism can be summed up as follows -
    FROM EACH ACCORDING TO THEIR WILL AND TOO EACH ACCORDING TO THEIR ABILITY.
     
    Last edited: Jan 7, 2020
    roorooroo likes this.
  2. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    38,578
    Likes Received:
    1,702
    Trophy Points:
    113
    A poor start! The price mechanism is not specific to capitalism. Its consistent, for example, with market socialism.

    Also bobbins! This is a corruption of the invisible hand analysis by Adam Smith. Of course Smith only mentioned the concept a couple of times. His focus was much more on egalitarianism.

    Free market economics actually delivered neoliberalism. We also know that really refers to cronyism, with rentier capitalism running amok. There's a reason why free market economics has been so vigorously pushed by rich folk...

    Also bobbins! Free market capitalism does not exist. Also, given various market failure, it wouldn't be desirable. Essentially it's as 'pie in the sky' as neoclassical's perfect competition.

    Speaking more generally, there is an obvious right wing corruption here. Essentially they're pretending to be classical liberals, forgetting two key aspects. First, they base their simple approach on a 'long dead' capitalism free of corporate power. Second, they deliberately oversimplify to avoid the analysis actually adopted by the classical economists. There is no understanding of capital-labour conflict. Smith and co would find the blinkered use of supply and demand devoid of any relevance to the real world.
     
    Derideo_Te likes this.
  3. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

    Joined:
    Oct 24, 2016
    Messages:
    8,211
    Likes Received:
    1,598
    Trophy Points:
    113
    Gender:
    Male
    The science of economics needs no further definitions to suit particular political penchants.

    The necessary wording is already available, but it seems to have escaped you:
    *Capitalism - an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.
    *Free-market - an economic system in which prices are determined by unrestricted competition between privately owned businesses.

    Both are key attributes that define economic-system essential elements as exist in many but not all parts of the world.

    As a consequence also, your definition of "free-market capitalism" above is highly personal and related only tangentially to the behaviour of "free-markets" actually.

    And thus, the proper context for any economic debate are the definitions that I have simply reprinted above - after all, they've been around for more than a century and a half and don't need any refinement whatsoever.

    Meaning what? Meaning that you are harping about "individual rights" and thus are blind to "collective rights". Thus, if you are upset that your individual-rights are being transgressed, you need only move over to an island somewhere and live all alone - or, better yet, with that human-hybrid that believes your definition should dominate.

    All modern markets are highly sophisticated devices that require more than just raw Supply&Demand to be constituted and shared in any nation. They require a set of laws to assure that the sharing is
    fair&equitable* - which principally means that taxation of participants must be also fair&equitable.

    And Uncle Sam - as regards that principle - is nowhere in the game. He's on some other planet where the Best Get the Most. Which is due to a Policy of Income Taxation that
    viciously and unfairly is preferential to a highly small (population-wise) group of families that accumulate mindless riches (under the present taxation code) to show how clever they are.

    Whilst 14%¨of the population in that country are kept in an economic prison below the Poverty Threshold ($24K annual income for a family of 4) eking-out a bare existence. What is exactly that population? This factual conclusion (from here):

    And from Wikipedia here:
    *Note that "equitable" does not mean "equal"!
     
    Last edited: Jan 9, 2020
    Derideo_Te likes this.
  4. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    38,578
    Likes Received:
    1,702
    Trophy Points:
    113
    This is also wrong, only demonstrating a complete innocence of political economy. It is deliberately structured to confuse capitalism with the economic spectrum (with government interference then necessarily weakening capitalism). That is ignorant on two levels. First, government is the key economic agent in creating capitalism and ensuring its stability. Second, feasible socialism makes no reference to state ownership: from market socialism to the anarchists, the focus is on avoiding state power.
     
    Derideo_Te likes this.
  5. Derideo_Te

    Derideo_Te Well-Known Member

    Joined:
    Oct 3, 2015
    Messages:
    40,464
    Likes Received:
    31,156
    Trophy Points:
    113
    The DELUSION of Free Market Capitalism has CAUSED a massive WEALTH DISPARITY that will end badly for the wealthy if they refuse to address the egregious shortcomings from which only they BENEFIT and everyone else LOSES!

    https://www.forbes.com/sites/mikeco...osers-of-free-market-capitalism/#6810ecd77f75

    That article was written 4+ years ago and NOTHING has CHANGED for the better.

    "Free Market Capitalism" is still GUTTING the American Middle Class and the MAJORITY of those 100 million working voters are no longer willing to allow the "winners" to STEAL their earnings and their future.

    Wealth disparity leads to CHANGES in society and we are seeing that beginnings of those changes in the REJECTION of the DELUSION of "Free Market Capitalism".
     
    Reiver and LafayetteBis like this.
  6. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

    Joined:
    Oct 24, 2016
    Messages:
    8,211
    Likes Received:
    1,598
    Trophy Points:
    113
    Gender:
    Male
    Let's hope so!

    The upcoming election will be a deep, deep stand-off between the Left and the Right regarding who gets what and why. Income Disparity is a disaster in the US and not only because it jails the poor below the Poverty Threshold. Yes, passing a national Minimum Wage at $15/hour will help ameliorate the lifestyle existence of those presently below the threshold.

    But, to my mind, far more importantly is the profound fact of Age Change whereby we as a nation (along with most living on earth) are moving from the Industrial to the Information Age (aided and abetted largely by the Internet). Meaning what?

    Today, both in Europe and the US between 10 and 13% of all workers come from the Industry Sector. For the most part, jobs are being created in the Services Sectors, which largely require advanced educational degrees.

    Meaning that very much of the present workforce does not have the necessary skills for the Information Age, for which the skill-sets required for Post-secondary Education (vocational to doctorate) degree are far too expensive for the poorer American families.

    This information is nothing new. Already the bulk of loans for postsecondary education is the larger part of the US's National Debt when excluding government debt.

    What's a country to do? Well, the European Union has the best answer. To join the EU, a country must agree to provide gratis (or at very low cost) both National Health Care and Post-secondary Education. (Yes, those are the principal reasons why taxation is so much higher in the EU than in America.)

    Is it worth the effort? That is, to bear the higher-taxation (and therefore lower Net Income). Most Europeans agree that it is both right and proper because those who have families nowadays have already earned their degree in that manner.

    That is, free, gratis and for nothing* ... !

    *Yes, there is an annual fee of around $800 for a school year in most of the EU. Plus room&board unless one stays at home, which most do.
     
    Derideo_Te likes this.
  7. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

    Joined:
    Oct 24, 2016
    Messages:
    8,211
    Likes Received:
    1,598
    Trophy Points:
    113
    Gender:
    Male
    How many of us remember the age-old adage that seemed to pop-up continually in economics-courses: "Guns or Butter?" (Let's say "Tertiary Schooling" instead of Butter.)

    Jerko in the White House has opted for the former. He lowered upper-income taxation on the filthy-rich and then also increased massively the DOD-budget. Both were very evidently an effort to assure funding for his second term-of-office election that would come from that business sector!

    Whilst the country needs mostly the latter of the two options, that is, tertiary education at very low cost* ...

    *Which Hillary had promised if elected. But the Electoral College took it away from us!
     
    Last edited: Jan 9, 2020
    Derideo_Te likes this.
  8. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    38,578
    Likes Received:
    1,702
    Trophy Points:
    113
    Suggesting the EU has the answers is very naive. The EU has encouraged neoliberalism, demonstrating no appreciation of the radical change required to generate sustainable capitalism. This often just refers to 'beggar thy neighbour' policies, where foreign countries suffer in return for the likes of France to maintain its conservative practices (designed only to maintain aspects such as agricultural subsidies).
     
    Idahojunebug77 likes this.
  9. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    38,578
    Likes Received:
    1,702
    Trophy Points:
    113
    Also Blairite 'education, education, education' is a centrist red herring. Under such investments Britain actually saw a reduction in social mobility.
     
    Idahojunebug77 likes this.
  10. Derideo_Te

    Derideo_Te Well-Known Member

    Joined:
    Oct 3, 2015
    Messages:
    40,464
    Likes Received:
    31,156
    Trophy Points:
    113
    Agreed that the EU nations have evolved beyond the childish delusions of "free market capitalism" and implemented the greater prosperity overall through higher standards of living with both education and healthcare. That puts the EU nations in a stronger position when it comes to the Information Age.

    What is often overlooked in these discussions are what is happening in developing nations like Brazil, India, China, Nigeria and South Africa. Collectively they are the future consumer markets because the jobs that vanished from America have been transferred to these other nations and the young people there have been educating themselves at significantly lower costs than the equivalent tertiary education here in America.

    This means those nations have an up and coming middle class with disposable income and while all of them do face significant issues WRT poverty and crime they will become less of an impediment to prosperity as those nations mature from developing to developed over the rest of this century.

    The EU can adapt to this change and even benefit from tourism from these nations. Our problem here in America is our immense national debt burden that is going to be a significant handicap to any future investments.

    There is a solution, as mentioned in the article, which is for the wealthy to abandon their GREED OBSESSION and start paying living wages and paying down the debt. That is going to be obstructed every inch of the way which means it will take far longer for America to recover from it's current predicament and in the meanwhile those developing nations will move on towards their own prosperity because they will be the beneficiaries of opportunities that America can no longer afford to take advantage of.

    Perhaps the most significant threat to the future of America is the cost of maintaining our military. It must be rationalized and downsized but doing so is going to mean a significant change in attitudes. In this respect it will be the Millennials who will take the pragmatic approach and make the sane decision between guns and education.
     
  11. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    38,578
    Likes Received:
    1,702
    Trophy Points:
    113
    Tell that to the Greeks? The EU isnt progressive. It is regressive. Its ultimately structured to maintain the Franco-German status quo.

    There is a slight disconnect between this comment and the previous. It suggests that trade diversion is the norm, as suggested by the notion of job transfer. Germany has maintained high levels of manufacturing and avoided these problems. However, that isnt reliant on education. It's more to do with collective bargaining and a system where long term job investments out-trump short term speculation. Indeed, prior to Thatcherism and its fundamentalist approach to labour market flexibility, the UK was able to compete with Germany (despite a more elitist tertiary education system) through on-the-job training.
     
  12. bricklayer

    bricklayer Well-Known Member Past Donor

    Joined:
    Jan 12, 2011
    Messages:
    8,898
    Likes Received:
    2,741
    Trophy Points:
    113
    I much prefer Dr. Sowell's definitions. They are much more concise and include much less irrelevance.
    The definitions use choose are, in my opinion, but a spin on capitalism and free markets. A rather telling spin at that.
     
    roorooroo likes this.
  13. bricklayer

    bricklayer Well-Known Member Past Donor

    Joined:
    Jan 12, 2011
    Messages:
    8,898
    Likes Received:
    2,741
    Trophy Points:
    113
    There is as much evidence that poor people are poor because wealthy people are wealthy as there is evidence that skinny people are skinny because fat people are fat.
    Your intolerance of others having more than you is nothing but bald faced envy.
     
    roorooroo likes this.
  14. bricklayer

    bricklayer Well-Known Member Past Donor

    Joined:
    Jan 12, 2011
    Messages:
    8,898
    Likes Received:
    2,741
    Trophy Points:
    113
    Why don't you just do it yourself? You're a success. You certainly don't expect to be averaged up. I'm sure that you expect to have to lower your standard of living when things get fair, so why don't you just do it now? Why do you wait for others to be compelled by force of law to do it also? You pay for someone else's medical care. You do what you can. You see, that's called charity. Charity has a completely voluntary nature. What you propose has a compulsory nature. The way I see it is that you have a problem with the voluntary. You also have a great desire to compel others to do what you don't even do yourself.

    Now, if I'm all wrong about you, and you're not a success, I apologize. In that case, you seek to benefit from an averaging of living standards; and therefore, are most likely motivated by simple greed.
     
    roorooroo likes this.
  15. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    38,578
    Likes Received:
    1,702
    Trophy Points:
    113
    The definitions are used to peddle ideology, rather than economic understanding. Terms are abused in order to promote inefficient practices. For example, supply side economics was really just an excuse to coerce to a state that tolerates destructive inequalities.
     
    Last edited: Jan 9, 2020
    Idahojunebug77 likes this.
  16. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    38,578
    Likes Received:
    1,702
    Trophy Points:
    113
    It's just a matter of fact that neoliberalism creates higher poverty and lower social mobility. Free market economics is used to hinder entrepreneurial activity and bolster cronyism.
     
    Idahojunebug77 and Derideo_Te like this.
  17. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

    Joined:
    Oct 24, 2016
    Messages:
    8,211
    Likes Received:
    1,598
    Trophy Points:
    113
    Gender:
    Male
    What you do not understand about an economy is that it is very much like a sport with winners and losers. The point being that in any "developed" nation the losers are given their proper recognition as "fellow citizens". Which means that their financial-situation - acutely linked to their Income that is acutely linked to their level of education - is hampered by the fact that far to many will never ever have the means of obtaining the sacred postgraduate degree.

    Which means that far too many of the population are stuck below the Poverty Threshold ($24K annually for a family of four).

    Moreover, I doubt you even care. For you, life is all about winning because you have been mesmerized sports-TV that keeps insisting upon that fact. A sport is a sport and healthy activity. But it is by no means comparable to a well-functioning economy - which also has competition but the rules-of-play must be far more evolved to achieve societal parity (fairness).

    No apology necessary. What I am and what you are are totally irrelevant - as I've tried to explain above. Except in one fact: You are an American living in the US, and I am an American living in the European Union. The two entities are very, very different conditionally.

    What we are is a nation with acute Income Disparity brought about by (1) Insufficient taxation/redistribution of Upper-income and (2) Inadequate investment in the achievement-for-all-who-try of a postgraduate education. Which would allow more of our folks to obtain a higher income level than exists today. (Given that we are changing "ages" - from the Industrial to the Information Age.)

    And for as long as Uncle Sam continues to believe the fallacy that life's outcome is cast like rolling dice, he remains the figurehead of a pathetically unfair country in which to live.

    And the country wont change until the majority understand that it is neither the Rabid Right nor the Lethargic Left that can change fundamentally anything. Somewhere in the middle is socioeconomic policy that set's a country on the road to Societal Decency wherein most people can live comfortably because "income-fairness" is its first condition.

    That is, a country where outcomes are not a matter of rolling-the-dice but of investing in the fundamental basics of any nation - that is, general-level of adequate Human Intelligence (by means of full primary-secondary-tertiary education) and Health Services that are truly universal because they are NOT the most expensive on earth. (Which they are in the US.)

    The correction Uncle Sam needs is as simple as that - unfortunately that correction is more than just a matter of electing a PotUS and a Congress, but the improving drastically the way such are elected* ...

    *Meaning to rid the electoral process of two very bad rules introduced in 1812 when it established the Electoral College at the national level (for the presidency) and election Gerrymandering at the state-level. Neither of which are admissible in a truly fair-democracy because they warp the outcomes of both the national and state popular-vote.
     
    Derideo_Te likes this.
  18. bricklayer

    bricklayer Well-Known Member Past Donor

    Joined:
    Jan 12, 2011
    Messages:
    8,898
    Likes Received:
    2,741
    Trophy Points:
    113
    So, poor people are poor because wealthy people are wealthy, for the same reasons that, skinny people are skinny because fat people are fat? Quite frankly, I don't see the nexus in either case.
     
    roorooroo likes this.
  19. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

    Joined:
    Oct 24, 2016
    Messages:
    8,211
    Likes Received:
    1,598
    Trophy Points:
    113
    Gender:
    Male
    You like your because they suit your misinterpretation of Economic Fairness. If you have any sense whatsoever of the meaning of "fairness" or "equitability".

    The definitions I "chose" are those that exist for quite some time. And not "inspirations" to justify the unfairness of a unchecked market-economy ...
     
  20. bricklayer

    bricklayer Well-Known Member Past Donor

    Joined:
    Jan 12, 2011
    Messages:
    8,898
    Likes Received:
    2,741
    Trophy Points:
    113
    The definitions I cited, I disclosed that I read from Dr. Sowell. Dr. Sowell attributes the concepts, if not the exact words, to Adam Smith.

    When Adam Smith first introduced self-possession into public discourse in Europe, it was mocked as, "everyone is a king thinking". The old adage, "every man's home is his castle", was originally a punchline to a joke at the expense of "every man is a king thinking". It is easy to forget that, until 1776, almost everyone who ever lived was owned by someone else.

    It is from the idea that each owns them self (self possession) that my politics and my economics extend. You and I are so diametrically opposed that I am compelled to ask, who owns you?
     
  21. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

    Joined:
    Oct 24, 2016
    Messages:
    8,211
    Likes Received:
    1,598
    Trophy Points:
    113
    Gender:
    Male
    What is patently wrong is that you do not understand the fundamentals of an economy, and the unequivocal necessity to assure Income Fairness.

    Because, like most, you believe in "winner takes all".

    An economy must be run on clear rules of societal-equitability, not just happenstance ...

    *Meaning (from a dictionary), "characterized by equity or fairness; just and right; fair; reasonable: equitable treatment of all citizens. Law.".
     
  22. bricklayer

    bricklayer Well-Known Member Past Donor

    Joined:
    Jan 12, 2011
    Messages:
    8,898
    Likes Received:
    2,741
    Trophy Points:
    113
    If that's your conclusion, who am I to try to talk you into competition if competition is not what you want. On the other hand, I am quite ready, willing and able to compete, and I never underestimate the value of a lack of competition.

    FROM EACH ACCORDING TO THEIR WILL AND TO EACH ACCORDING TO THEIR ABILITY

    Equal outcomes are not a noble goal, and envy is no substitute for charity.
     
    Last edited: Jan 9, 2020
    roorooroo likes this.
  23. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    38,578
    Likes Received:
    1,702
    Trophy Points:
    113
    Totally wrong! Smith's moral sentiments has no common ground with the fake libertarians.

    Even prior to the rise of the corporation, he understood how inequalities developed through inefficiency. Rather than a meritocracy, luck through birth dictated outcome.
     
  24. Derideo_Te

    Derideo_Te Well-Known Member

    Joined:
    Oct 3, 2015
    Messages:
    40,464
    Likes Received:
    31,156
    Trophy Points:
    113
    Pathetic response given that you were unable to rebut a single FACT in the Forbes article and instead jumped into the ad hom sewer instead.

    That exposes that you have insufficient grasp of the subject matter in order to engage in a substantive debate.

    Sad!
     
    Moonglow likes this.
  25. Reiver

    Reiver Well-Known Member

    Joined:
    Sep 24, 2008
    Messages:
    38,578
    Likes Received:
    1,702
    Trophy Points:
    113
    There is an irony in free marketeers referring to 'class envy'. Within liberal democracy, it is true that poverty and income inequality can be confused. The relative definition of poverty will lead to an increase in poverty if the rich do 'progressively' better. However, we have seen how free market economics has engineered rentier capitalism. Rent is, by definition, zero sum in its nature; someone benefits at the expense of another. That ranges from labour market exploitation (where employer makes artificially high profit) to speculation/fraud (where the finance sector wins at the expense of economic stability). It becomes automatically true that the rich are getting richer at the expense of the poor.
     
    Last edited: Jan 10, 2020
    Derideo_Te likes this.

Share This Page