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Is America still the most capitalist country? Is America still the most capitalist country?

12-16-2009 , 08:52 PM
Quote:
Originally Posted by ArturiusX
So do you feel bailouts to the banks are still wrong given they have paid the money back?
Forgive me for intruding on this debate but I believe that an objectivist/capitalist/individualist would argue that the banks are free to prosper or fail, but if they do so, they do it along and any capitalist would be completely indifferent to the fate of the financial institutions because they are private enterprises completely distinct from 'any' government function. (Obviously a person would want to see broad prosperity since it would generate more demand for his or her goods/services.)

In an ideal capitalist world, government would only protect people's rights, such as private property and freedom from violence and various other persecutions (race, religion, sexual orientation and the like.) It would be completely indifferent to the economy of the country it was in, and would simply be an objective force to make sure the rule of natural law was followed.

But, alas, in today's day and age people expect the government to 'do' something to fix a crisis (we can debate what actually caused the subprime mess if anyone likes, as well) that its duties have gone way beyond what was originally anticipated back when the Constitution was written.

Sorry I got off topic, but I would say that a capitalist would be glad to see the banks repay the money simply because it will mean the government will have less of a reason to regulate them.
Is America still the most capitalist country? Quote
12-16-2009 , 08:57 PM
Quote:
Originally Posted by kwon234ioud
Also excessive intervention can distort market forces and favor certain coalitions at the expense of the many. Also true.

On the other hand, lack of government intervention can lead to instability as people are free to take outsized risks without any regard to others. There are a lot of actions that cause negative externalities. These cannot be solved by free market forces.

I think you should read other people's perspectives too before equate captialism=good. The best way to frame the question would be:

What sort of system would provide the best incentive to motivate people to work hard without moral hazard that would ensure the welfare of America? Does that system still exist in America?
As to your first point: Who defines what is 'enough' intervention? Obviously the government will want as much power as it can get because people naturally want power over each other.

Risk is inherent in everything. Bust is always a possibility for an entrepreneur. But the prospect of boom is what pushes us forward as a society; the prospect of profits and a better life. That is the 'moral' system about which you opine; one that rewards he who can out think or outproduce his competitors for the gain of all (since it is always the consumer for whom he works.)

I understand I am obviously biased but I have investigated the data about the standard of living throughout the ages, and at no time has more good come to the most people than during the industrial revolution when the Captains of Industry completely revolutionized many aspects of production and distribution to bring things which were only decades before playthings of the rich to everyone.

As to what things cannot be solved by free market forces, could you please elaborate some concerns you have?
Is America still the most capitalist country? Quote
12-16-2009 , 10:29 PM
I would say luxenburg and belgium are both runner ups to the usa,
Is America still the most capitalist country? Quote
12-16-2009 , 10:42 PM
Quote:
Originally Posted by Grease
Forgive me for intruding on this debate but I believe that an objectivist/capitalist/individualist would argue that the banks are free to prosper or fail, but if they do so, they do it along and any capitalist would be completely indifferent to the fate of the financial institutions because they are private enterprises completely distinct from 'any' government function. (Obviously a person would want to see broad prosperity since it would generate more demand for his or her goods/services.)

In an ideal capitalist world, government would only protect people's rights, such as private property and freedom from violence and various other persecutions (race, religion, sexual orientation and the like.) It would be completely indifferent to the economy of the country it was in, and would simply be an objective force to make sure the rule of natural law was followed.

But, alas, in today's day and age people expect the government to 'do' something to fix a crisis (we can debate what actually caused the subprime mess if anyone likes, as well) that its duties have gone way beyond what was originally anticipated back when the Constitution was written.

Sorry I got off topic, but I would say that a capitalist would be glad to see the banks repay the money simply because it will mean the government will have less of a reason to regulate them.
The problem is, we don't live in a utopian capitalist world, so trying to apply any rationalism concepts is not going to work. Some address this by going down anarcho-capitalist routes, but as long as the state exists, it will be an imperfect system that can be gamed. As long as that door is open, a perfect capitalist society can never exist.

So the world you speak of is about as relevant as the world Marx speaks of. Its completely detached from reality and only half applying its concepts will only lead to exploitation by those in power (think capitalism for the poor, socialist for the rich). Those who control the resources and capital can impede progress for their own benefit, using the rhetoric of free markets, when under the hood, the markets are anything but free, with corruption in politics, business, and biased regulation.

To seek out this world and say 'well less regulation is always better' is completely and totally wrong. A world of zero regulation may be better. That world will never exist. A world of biased regulation, with corrupt law makers and double standard is what happens in practice when we try and de-regulate. Exhibit A: This whole crisis.

The fact is, if the large banks go under, we enter a great depression. Objectivism may say, so what, we have to learn. I say f-that, depression set society back too much and the crowd really doesn't learn much from them anyway (case in point: history). And people starve, die, and social fabrics get torn apart. Keynes may have had some flawed ideas, but his idea for the use of government was not one of them. Keynes new how important it was to control vicious cycles, and dealing with the reality, the only body who can do that is a legitimate government.

Its important to separate your views on the world from the reality of policy.
Is America still the most capitalist country? Quote
12-17-2009 , 06:45 AM
Quote:
Originally Posted by ArturiusX
So do you feel bailouts to the banks --There are many more of course--are still wrong given they have paid -- some of --the money back?
Fundamentally yes.
Is America still the most capitalist country? Quote
12-17-2009 , 10:16 AM
Quote:
Originally Posted by ArturiusX
The problem is, we don't live in a utopian capitalist world, so trying to apply any rationalism concepts is not going to work. Some address this by going down anarcho-capitalist routes, but as long as the state exists, it will be an imperfect system that can be gamed. As long as that door is open, a perfect capitalist society can never exist.

So the world you speak of is about as relevant as the world Marx speaks of. Its completely detached from reality and only half applying its concepts will only lead to exploitation by those in power (think capitalism for the poor, socialist for the rich). Those who control the resources and capital can impede progress for their own benefit, using the rhetoric of free markets, when under the hood, the markets are anything but free, with corruption in politics, business, and biased regulation.

To seek out this world and say 'well less regulation is always better' is completely and totally wrong. A world of zero regulation may be better. That world will never exist. A world of biased regulation, with corrupt law makers and double standard is what happens in practice when we try and de-regulate. Exhibit A: This whole crisis.

The fact is, if the large banks go under, we enter a great depression. Objectivism may say, so what, we have to learn. I say f-that, depression set society back too much and the crowd really doesn't learn much from them anyway (case in point: history). And people starve, die, and social fabrics get torn apart. Keynes may have had some flawed ideas, but his idea for the use of government was not one of them. Keynes new how important it was to control vicious cycles, and dealing with the reality, the only body who can do that is a legitimate government.

Its important to separate your views on the world from the reality of policy.
These are all very valid and germane points, I must admit. Obviously we will never live in a society that mirror's Galt's Gulch.

I think that if you look at the crisis not as a product of excessive greed and a failing of capitalism (which it is not, in my opinion) but as a result of politicization of the mortgage process by HUD by both political parties you may come to completely different conclusion. Thomas Sowell has an excellent 5 or 6 part article in IBD about the fundamentals of the subprime mess, which was brought around by the government trying to help minority borrowers secure loans they typically can't (again, the best of intentions.) What happened was quotas were set and Fannie Mae and Freddie Mac soon became bogged down with loans that simply couldn't get repaid. And the reason the private sector started doing it was because the government not only allowed them to, but suggest subtle (or not so subtle) racism on the part of the big banks.

And thus everything spiraled out of control. Started by the government trying to help people.

So from my perspective (and maybe I'm wrong) it wasn't the banks fault at all but the government saying that it knew to whom to lend money better than bankers. And after hearing about Obama's scathing speech to the Wall Street "fat cats" earlier this week lambasting them for not loaning money now, I shudder to think nothing has been learned (so I definitely agree with you there, that people never learn.)
Is America still the most capitalist country? Quote
12-19-2009 , 10:55 AM
One could argue that this thread belongs in the politics discussion. Of course given the impact of government on business and finance, there's definitely tons of intersection.

I would argue that America has never been terribly free-market. But, it is stable and more free-market than its cohorts, which thus explains its relative success.

btw, Art, maybe I shouldn't say this as I don't want to spend hours on the internet discussing it, but I strongly disagree with your logic that this crisis is Exhibit A against deregulation.
Is America still the most capitalist country? Quote
12-19-2009 , 10:51 PM
Don't worry OP, its still a capitalist country.

I'm a fan of Rand, but I don't agree with everything she says. If we did have pure capitalism I think its pretty obvious things would go off the rails, and it would not be a utopia. Communism doesn't produce a utopia either. The correct answer in life rarely lies at the extremes.
Is America still the most capitalist country? Quote
12-20-2009 , 03:16 AM
Quote:
Originally Posted by Grease
Started by the government trying to help people.

So from my perspective (and maybe I'm wrong) it wasn't the banks fault at all but the government saying that it knew to whom to lend money better than bankers. And after hearing about Obama's scathing speech to the Wall Street "fat cats" earlier this week lambasting them for not loaning money now, I shudder to think nothing has been learned (so I definitely agree with you there, that people never learn.)
This is has been thoroughly debunked. Loans written under government legislation makes up such a small percentage of the sub prime loans.

If you need to see the isolated effect of banker over-exuberance, look at commercial real estate right now. Same bubble as residential, no government involvement, and a lot of bad loans that weren't to poor people. The problem was simple, there was a bubble, and it got to the point where everyone implicitly colluded to keep it going because they knew of the consequences of musical chairs. These are the problems with an ultra-rational world, game theory and group behavior problems become complex, and ultimately favor the less rational long term solution.
Is America still the most capitalist country? Quote
12-20-2009 , 04:59 AM
Quote:
Originally Posted by ArturiusX
So do you feel bailouts to the banks are still wrong given they have paid the money back?
Is selling stock and debt really paying it back though?
Is America still the most capitalist country? Quote
12-20-2009 , 05:22 AM
Quote:
Originally Posted by Grease
I have investigated the data about the standard of living throughout the ages, and at no time has more good come to the most people than during the industrial revolution when the Captains of Industry completely revolutionized many aspects of production and distribution to bring things which were only decades before playthings of the rich to everyone.

As to what things cannot be solved by free market forces, could you please elaborate some concerns you have?
you must have missed a lot though. If we are talking about pure free market capitalism I assume we are talking about the possibility of "perfect competition" as defined by Adam Smith. Or any competition for that matter between 2 or more firms. This didn't exist in many industries before the Sherman Anti-trust act and government busting up the monopolies like Standard Oil and General Steel.

Unregulated capitalism allows for total vertical and horizontal consolidation that produces pure monopolies. So overall, pure capitalism produces monopoly which is not capitalism. This is going on history.

Unregulated free market environment was bad for workers and consumers before government stopped it. There were sweat shops and factories in the 1800s with horrible,horrible living conditions and no minimum wage. The workers movement and unions was good. At the least it got rid of required 70+ hr work weeks,bellow poverty living conditions provided by factories and gave weekends off. That's right. You can thank unions for 40 hour work weeks with paid overtime and weekends off.

Last edited by Jupiter0; 12-20-2009 at 05:47 AM.
Is America still the most capitalist country? Quote
12-20-2009 , 06:05 AM
Quote:
Originally Posted by Jupiter0
Is selling stock and debt really paying it back though?
It is in terms of the govts balance sheet.
Is America still the most capitalist country? Quote
12-21-2009 , 12:40 PM
[QUOTE=ArturiusX;15485270]This is has been thoroughly debunked. Loans written under government legislation makes up such a small percentage of the sub prime loans.
QUOTE]

Who set the interest rates (the price of money) Art?
Sub prime loans are a small percentage of the bubble.
Not debunked.
BTW, I don't think many in finance believe in a utopian dreamland.
Is America still the most capitalist country? Quote
12-21-2009 , 04:41 PM
Of course the fed is to blame. The fed is considered a separate entity to the government though.
Is America still the most capitalist country? Quote
12-21-2009 , 06:45 PM
I think an interesting question would be, how would the subprime mortgage crisis have unfolded if the overall level of leverage in the economy was lower? If our economy was not as complex as it is? If our society was not so convinced of using models to predict human behavior?

This crisis is a systemic one; lots of people are to be blamed. There's been so many financial crises in the past two decades, both when a democrat was in office and when a republican was, that I'm skeptical whether the overall "level of capitalism" has anything to do with it.
Is America still the most capitalist country? Quote
12-21-2009 , 06:49 PM
Probably not but the growth rate for the last 20 years would certainly by a lot lower.
Is America still the most capitalist country? Quote
12-21-2009 , 07:53 PM
Quote:
Originally Posted by Jupiter0
you must have missed a lot though. If we are talking about pure free market capitalism I assume we are talking about the possibility of "perfect competition" as defined by Adam Smith. Or any competition for that matter between 2 or more firms. This didn't exist in many industries before the Sherman Anti-trust act and government busting up the monopolies like Standard Oil and General Steel.

Unregulated capitalism allows for total vertical and horizontal consolidation that produces pure monopolies. So overall, pure capitalism produces monopoly which is not capitalism. This is going on history.

Unregulated free market environment was bad for workers and consumers before government stopped it. There were sweat shops and factories in the 1800s with horrible,horrible living conditions and no minimum wage. The workers movement and unions was good. At the least it got rid of required 70+ hr work weeks,bellow poverty living conditions provided by factories and gave weekends off. That's right. You can thank unions for 40 hour work weeks with paid overtime and weekends off.
Go pick up Rand's book titled "capitalism." She provides rational and logical arguments to why capitalism does not produce true monopolies (goverments do [through antitrust laws]), how it raises the standard of living, and generally speaking why unions (and all organized "demanders") are bad and not very rational.
Is America still the most capitalist country? Quote
12-23-2009 , 03:13 AM
Quote:
Originally Posted by ArturiusX
Of course the fed is to blame. The fed is considered a separate entity to the government though.
Touche sir, agreed.
Is America still the most capitalist country? Quote

      
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