Capitalism is a failing system, simply because it does not model the realities of the way we act.

[originalpckelly]

The theories that are popular in economics, largely expect every consumer to make logical decisions about their money. However, recent studies demonstrate that people make all kinds of illogical decisions.

-If you are sad, you believe the value of a product is much higher.

-If you just wrote down a totally unrelated number which is higher than a number someone else wrote down, and the two of you are expected to evaluate the price of something, you will estimate the price higher, because the starting point will be affected by the number you wrote down.

-You have a preference for the here and now, and it is difficult to quantify that. This impacts the whole economy, as people are very willing to enter abusive credit relationships in order to get what they want now, and pay too much for it later.

-This is hidden inflation. How much are you really paying for something, when you take interest and late fees, and other fees into account?

The fact that there are no mechanisms in our economy to counterbalance these and other human quirks, allows our economy to be distorted by this false, emotionally related information.

I was just reading in a book recently that 90% of the price of a pair of designer jeans is advertising and profit.

Can you believe that?

This system is wild and unsustainable. We cannot continue to do this folks. This system is headed for a collapse.

I only hope to hell that we don't fuck it up any more than it already is.

[TBF]

1. Recommend.

Marx and Lenin both spoke about this - Lenin's Imperialism really describes the point we are at now: http://www.marxists.org/archive/lenin/works/1916/imp-hsc/ (you can read Imperialism for free here, and imho it's easier reading than Marx).

People seem to think we need a "mix" of capitalism/socialism - I have a feeling that is because we are so ingrained with capitalism here. Even when we see with our eyes that it doesn't work, we have these magical thoughts about regulating it.

Well, at any rate, I'm glad intelligent folks are finally starting to see it for what it is. I can say that is one difference between the parties - the republicans are still so gung-ho free market, even when they are suffering themselves. Really strong magical thinking problem there ...

[socialist_n_TN]

14. Your second paragraph is SO spot on

It IS the product of over a century of propaganda conflating an economic system (capitalism) with a political system (bourgeoisie "democracy"). Even within the system they aren't supposed to be the same, but they've been merged in the minds of most of the people BY the propaganda. The good thing is, even with all of this propaganda for all of this time about the "benefits" of "regulated" capitalism, the system itself is losing support. The last poll I read showed that only 52% (a BARE majority) thought that capitalism was a beneficial system for most of the people and over a third thought that it WASN'T. That's progress.

As long as a small group owns outright the economic means of support of the masses, it will NEVER be "democratic". But the propaganda has led to the "magical thinking" about regulation being some sort of panacea. Over the long term, history has shown that "regulation" DOES NOT WORK! So the question becomes for the supporters of "regulation": Do you want your children and grandchildren to be fighting this same fight a few decades down the time line? Keeping in mind that at any time (even this time-we haven't won anything yet) that if we lose, we are under the thumb of fascism.

[TBF]

18. I watch the materials my kids bring home from school now -

and granted we are in Texas but most of the textbooks used nationally are published here. They are taught from a young age that capitalism=democracy. Gloss right over the fact that the founding of the country was a European land grab, and that the country was built on labor kidnapped in Africa, brought here, and made to work for free under threat of death. They don't go into ANY of that with any kind of detail. So much mis-information to unlearn ...

[baldguy]

2. A capitalist economic system is like a drainage system for a watershed.

Is the path of a steam "logical" and "rational"? No, absolutely not. Left alone without any controls, a stream will sometimes flood, damaging & destroying property and killing anyone in it's path. It will also sometimes dry up & change course, taking away it's advantages.

Like a stream of water, a capitalist market is only useful when it's managed & controlled. Through our govt we dam rivers, build levees, and cut canals where rivers don't exist - all to harness the power that a stream of water can give us. Our govt must also act to stop markets from the harm they inevitably create, build in artificial separations between financial entities when they become too large, and create markets for publicly necessary functions which would not exist naturally.

The Republicans want to take away all the dams and levees, and fill in all the canals. And it's just too bad if most of the people live in a floodplain, or a desert.

[sam11111]

6. that model fails...has no image for central fact..the "power" of the stream is wages and they are

being cut to dollar a day level globally.

Also ignores...ability to regulate is ending forever as billionaires take over.

Say goodby to dams and levees forever.

Toss the analogy of streams...it is, IMO, incomplete.

[baldguy]

21. It's a better analogy than "the invisible hand of the market".

As the OP says, the capitalist landscape isn't a logical or rational place. It's full of always-changing gullies & hillocks that block your view and impede the progress of most people. A very few - through sheer luck - will be allowed to traverse this landscape with ease & prosper.

[sam11111]

3. "more for the Boss means less for you"...solution?..co ops can make anything

dollar a day wage for every human is the goal..with just one billionaire.

The goal of the corporations is to have one billionaire own the whole world.

Merger, merger, merger - until one giant monopoly owns every house, farm, and factory.

When one billionaire owns the planet, he will only need 300 million of us to make the luxuries he wants.

The rest of us will be surplus.....just a lot of troublemakers. So we will be left to starve.

This is usually called "Population Reduction."
However I prefer the shorter term "Shrinkage" or just "Shrink."

Shrink is the hellish future we have under the corporate style of an economy.

[Puzzledtraveller]

4. you could argue

That it models exactly the way humans act, which is inherently selfish, which is a byproduct of survival, which is critical for evolution and the survival and propagation of a species. Altruism is not a survival mechanism. We are here because we wiped and assimilated other human species off the face of the planet.

[originalpckelly]

5. Greed and altruism, I think are the same thing at a different scale...

Greed helps promote the survival of the individual.
Altruism helps promote the survival of the group.

Same basic motivation, different scale.

[sam11111]

7. kindness may be the product of parental NURTURING

Just applied to all beings worldwide.

Essential to survival of one and all.

[PETRUS]

20. Altruism is a survival mechanism.

We are a social, cooperative species, not a bunch of individual actors. Human nature is complex.

[bigmonkey]

22. Only economists and theologians feel empowered to explain what human nature is.

That's my experience. I think what you've said here is the result of propaganda, and not in any way a proper characterization of human nature. The "philosophy" that economics is based on is faulty, initially enforced through implied threats, and just close enough to human nature to generate enough resources to "defend" itself by suppressing countervailing evidence. It's a sham, and one that's destroying our civilization.

[Name removed]

8. Deleted message

Message removed by moderator. Click here to review the message board rules.

[econoclast]

9. Ok. So humans are quirky and irrational.

If this invalidates capitalism because we don't make rational decisions ... Doesn't this also invalidate democracy for the very same reasons? We will vote for those who promise us solutions to our irrational demands?

Where do we find and how do we identify the the rational decisionmaker who gets to be philosopher-king?

If we make irrational decisions how would we recognize this person if we found them?

[originalpckelly]

10. This is the next step.

What do we do in response to this knowledge?

It is probably true that everyone is subject to this. Can we create rules which counterbalance these strange tendencies? Should we allow computers to regulate more of human life?

[themadstork]

11. Is it really a core tenet of democracy that we act rationally?

I think the main virtue of democracy is that state power is an expression of the will of the people, and not the will of tyrants. The will of the people may not always be rational, but it's still the people's; they still have that measure of control over their own lives.

[Laluchacontinua]

23. I think any conclusions about human rationality are complicated by the effect

of imperfect information.

In both cases, partly unavoidable & partly deliberately engineered by the powerful.

Also, the definition of "rational" itself is political: does it mean to do what's best for me, damn everyone/everything else? Or what's best for "my" community (however defined, and on whatever illusionary basis?)

Not sure what it means exactly to act rationally.

[closeupready]

12. It's failing because the principal actors who move the economy socialize their losses while

privatizing their gains, playing matters from both sides of the deck.

That is, they espouse free markets when regulation interferes with their enrichment, and then clamor for government intervention in the form of direct subsidies (i.e., bailouts) when they lose money. They have corrupted their own economic principles.

I don't know what is going to come next, but the facts as I've just stated are a definite part of history books, and going forward, no one will be able to promote 'free markets' without accounting for the fact that free markets don't work in practice.

[randome]

15. It is NOT failing.

Recently, however, it took a wrong turn.

[closeupready]

17. Wrong. If it didn't fail, why did Paulson demand a bailout? Why did the banks take it?

"Look at what they do, not what they say."

[randome]

19. It wobbled because the legs of the stool it was standing on were sawed off.

Without meaningful regulations in place, the system is stressed and WILL collapse if remedial actions are not undertaken.

I don't think we're there yet. In fact, I think the tide is turning against unrestrained capitalism.

[dtexdem]

13. Wrong, it's a failing system because it doesn't COMPLEXLY model human realities.

;-)

A joke, but economic models, as any models, are simplifications from a complex world in aid of increasing understanding. The issue is that the simplification of many economic models are not in aid of increasing understanding, rather of supporting ideology.

[Nye Bevan]

16. "Get what they want now, and pay too much for it later".

Sounds like my friends and family members who lease a brand new car every 3 years while I am still driving my 1995 Accord.

But I'm not sure that abolishing capitalism is the appropriate response to this kind of behavior. I don't buy "designer jeans" either but I defend the right of people to spend their money on them (not defend to the death, however).