Capitalism, can it work?

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No, we are talking about this: does capitalism increase the standard of living across the board? To that end, you assert that it did not in the 19th century. This was what my statement was about, this was what your attempt to contradict me was about, and this is what I've been asking for evidence on ever since, to no avail.

I mean, I'll gladly argue even what you're saying even now (you seem to simply take for granted that a lack of options should exert no downward pressure on wages, for example), but it has bleep-all to do with the initial claim. And the idea that displaying an arbitrarily selected group of laid-off workers proves that the entire 19th century must not have resulted in a general standard of living increase is just straight-up spurious.



will.15's Avatar
Semper Fooey
What are we laking about? We are not talking about a minor workforce. We are talking about steelworkers working for one of the the largest steel makers of the time. And there are many other similar examples in other industries as well. Like in the oil industry and coal. You can look at a chart, but the reality is working conditions were miserable back then, wages were miserable. You said the standard of living for workers improved greatly under capitalism. That is not what the evidence shows in the 19th century. It wasn't until government intervened in the 20th century there was real significant improvement.
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What are we laking about? We are not talking about a minor workforce. We are talking about steelworkers working for one of the the largest steel makers of the time.
Yup. But we're also talking about the effects of an economic system on an entire nation for an entire century.

You rightly pointed out earlier that just because growth went up overall, it doesn't necessarily mean everyone benefited much. The implication of which is that anecdotal evidence (such-and-such got rich during the 19th century) doesn't tell us anything about long-term trends. A fine position...but one you've now completely abandoned.

And there are many other similar examples in other industries as well. Like in the oil industry and coal. You can look at a chart, but the reality is working conditions were miserable back then, wages were miserable.
Of course working conditions were miserable. Some of it was two hundred freaking years ago. The question is whether or not capitalism helps it get better. How many times does this have to be said?

Re: "you can look at a chart." You posted the link to the chart. Apparently without understanding what it meant. And what are you suggesting by comparing charts to "reality" as if they're different things? That the data they depict are wrong? If so, how?

You said the standard of living for workers improved greatly under capitalism. That is not what the evidence shows in the 19th century. It wasn't until government intervened in the 20th century there was real significant improvement.
Yeah, you already said this, and I already challenged you to substantiate it. You haven't. You can't say the "evidence shows" something without showing us the evidence.

How about, next time, instead of making a claim you can't back up, and then kicking up all kinds of dust on tangentially related things when I ask you to, you just not claim things you can't back up in the first place? That would save us both a lot of time.



will.15's Avatar
Semper Fooey
I haven't substantiated the standard of living for workers didn't improve seriously until governemnt intervened? Well, this is standard history. This is what you find when you read up on it. It is conventional wisdom. It is like challenging the Earth revolves around the sun. Are you arguing the Progressive Movement had nothing to do with improvements in the standard of living and working conditions, that it is just an amazing coincidence it occurred concurrently?



I haven't substantiated the standard of living for workers didn't improve seriously until governemnt intervened? Well, this is standard history. This is what you find when you read up on it. It is conventional wisdom. It is like challenging the Earth revolves around the sun.
Ironic point of comparison, seeing as how the opposite was conventional wisdom at one point, too. "It's cool, you can ignore that Copernicus guy; he's totally outside the mainstream." Also, you actually could point someone to mathematical proofs about the heliocentric theory. If what you're saying is conventional wisdom, that doesn't absolve you of substantiating it; it makes it all the more ridiculous that you won't.

Morever, leaving aside the fact that saying something is "conventional wisdom" just absolves you of having to think about it or make any kind of argument (yeah, surrender your critical faculties; that's always a great way to get at the truth), there's another problem: it's really just confirmation bias. I can point you to any number of economists who say otherwise, but we both know you'll brush them right off. That means that your "conventional wisdom" is just a collection of the claims you decide to accept. It achieves a phantom consensus by finding reasons to exclude all differing opinions.

It also doesn't jibe with your actual behavior. Why would you go out of your way to make this argument, dodge a bunch of requests for evidence to support it, and then like 10 posts later say you shouldn't have to?

Are you arguing the Progressive Movement had nothing to do with improvements in the standard of living and working conditions, that it is just an amazing coincidence it occurred concurrently?
No, it's not a coincidence, and if you think that's what's being suggested you've been following things even less than I'd hoped. They got those standards when they fought for them because they'd become economically viable. Workers have always wanted to work less and live more comfortably. We still do! But it happens when technology progresses sufficiently. You can simply declare that working 40 hours ought to provide a comfortable life, but try going back 500 years and saying the same thing. It wasn't possible then, and such things are not made possible by simply asserting that they ought to be. You can assert that pencils ought not to cost more than X amount, too, but it won't make mining lead any cheaper.

Workplace safety, shorter hours, benefits, etc., are the result of increases in wealth, not the cause of it. They don't magically become feasible because we demand them; we demand them because they're now feasible. And even that's pretty myopic, because mandating these things doesn't increase wealth, it just moves it around. It only ensures that a portion of the worker's wages (or the cost of the product or service) is adjusted to compensate it.



I am the Watcher in the Night
Capitalism only works for the few and not the plenty.
Only read a little bit of the opening article and a few posts but this one really stuck out.

I for one completely agree, capitalism is a system skewed in favour of the rich and powerful. We're seeing it in front of our very own eyes and some slightly older members have seen it multiples times.

The financial heart of capitalism contains a system which is not only unfair but morally unacceptable or at least it should be morally unacceptable. The interest system. It is a system where by you must pay more money than you owe, how that has been justified for so long is incredible. It feeds our greed and lust for material things (I'm guilty of this too so I don't wana sound like I'm taking the high road).

I ask you this, if you borrowed a tenner off a mate and when you went to pay him back he said he wanted 5% extra, would you think he was in his right mind or being an absolute prick?

I know, I know, the world wide economy is far more complicated and the counter argument is that interest is needed for banks to make money and our economy depends upon banks. It wasn't always this way. The question is, what type of financial system can replace the current capitalist one?

There are also other problems with capitalism, mainly regarding a disregard for nay sort of social responsibility, the proliferation of materialism over family and faith and the whole "stab who ever the heck you want in the back to get to the top". That attitude is ingrained into our minds at such an early age and done so with such expertise we don't even realise it until we sit down to think about it all.



Only read a little bit of the opening article and a few posts but this one really stuck out.

I for one completely agree, capitalism is a system skewed in favour of the rich and powerful. We're seeing it in front of our very own eyes and some slightly older members have seen it multiples times.
I'll ask you the same thing I asked MM when he said that before: what of the fact that it's resulted in dramatically higher levels of wealth for both the rich and the poor?

The financial heart of capitalism contains a system which is not only unfair but morally unacceptable or at least it should be morally unacceptable. The interest system. It is a system where by you must pay more money than you owe, how that has been justified for so long is incredible. It feeds our greed and lust for material things (I'm guilty of this too so I don't wana sound like I'm taking the high road).
Time is valuable. Interest is a reflection of that. It's also a reflection of the fact that people don't always repay what they owe.

I ask you this, if you borrowed a tenner off a mate and when you went to pay him back he said he wanted 5% extra, would you think he was in his right mind or being an absolute prick?
I'd think he was being a jerk...because we're friends. Because we trust each other and do favors for each other. And because it's a tiny amount. And note that this moral expectation--that you should be willing to make small loans to close friends without interest most of the time--has arisen in capitalistic societies just fine. Why do you and I both share this general expectation of favors for friends if capitalistic societies are brainwashing us to stab people in the back? The mere fact that you're making this argument undermines the point it's making. We both believe friends should do this, even though we both live in capitalistic societies.

Also, would you feel the same way if he wanted to borrow, say, $5,000?

I know, I know, the world wide economy is far more complicated and the counter argument is that interest is needed for banks to make money and our economy depends upon banks. It wasn't always this way. The question is, what type of financial system can replace the current capitalist one?
The argument for interest is not that we need it to have banks. Banks exist to manage things like interest, which predate them.

Money is a resource; it is valuable to be allowed to use someone else's money for a time. Just as it's valuable to use someone else's shovel, house, or car for a time. Some form of interest has existed as long as basically any real recognition of property has. It's completely necessary and totally inevitable as long as the notion of property exists.

There are also other problems with capitalism, mainly regarding a disregard for nay sort of social responsibility, the proliferation of materialism over family and faith and the whole "stab who ever the heck you want in the back to get to the top". That attitude is ingrained into our minds at such an early age and done so with such expertise we don't even realise it until we sit down to think about it all.
This doesn't bear much resemblance to any reality I've experienced. People don't teach their children this, schools don't each it, and it is looked down upon in many cultural forms; movies, TV shows, novels, stories, anecdotes, etc. I suppose you could argue that it happens on some deep, subtle level, but I don't know how such a thing would be detected. Where I come from, pretty much everyone is taught to be good and charitable independent of any law forcing them to be that way.

No system can stand without the virtue of its participants, be it capitalist or otherwise. Capitalism requires that people still be decent and fair to each other, and not make every attempt to exploit others within its laws. And as you may have noticed, we don't usually do this, and that's why it still works. If we are (or will become) the kinds of people willing to do this, then no system will withstand that level of selfishness.



will.15's Avatar
Semper Fooey
Ironic point of comparison, seeing as how the opposite was conventional wisdom at one point, too. "It's cool, you can ignore that Copernicus guy; he's totally outside the mainstream." Also, you actually could point someone to mathematical proofs about the heliocentric theory. If what you're saying is conventional wisdom, that doesn't absolve you of substantiating it; it makes it all the more ridiculous that you won't.

Morever, leaving aside the fact that saying something is "conventional wisdom" just absolves you of having to think about it or make any kind of argument (yeah, surrender your critical faculties; that's always a great way to get at the truth), there's another problem: it's really just confirmation bias. I can point you to any number of economists who say otherwise, but we both know you'll brush them right off. That means that your "conventional wisdom" is just a collection of the claims you decide to accept. It achieves a phantom consensus by finding reasons to exclude all differing opinions.

It also doesn't jibe with your actual behavior. Why would you go out of your way to make this argument, dodge a bunch of requests for evidence to support it, and then like 10 posts later say you shouldn't have to?


No, it's not a coincidence, and if you think that's what's being suggested you've been following things even less than I'd hoped. They got those standards when they fought for them because they'd become economically viable. Workers have always wanted to work less and live more comfortably. We still do! But it happens when technology progresses sufficiently. You can simply declare that working 40 hours ought to provide a comfortable life, but try going back 500 years and saying the same thing. It wasn't possible then, and such things are not made possible by simply asserting that they ought to be. You can assert that pencils ought not to cost more than X amount, too, but it won't make mining lead any cheaper.

Workplace safety, shorter hours, benefits, etc., are the result of increases in wealth, not the cause of it. They don't magically become feasible because we demand them; we demand them because they're now feasible. And even that's pretty myopic, because mandating these things doesn't increase wealth, it just moves it around. It only ensures that a portion of the worker's wages (or the cost of the product or service) is adjusted to compensate it.
Workers were demanding those things decades before the Civil War and it wasn't until the early part of the Twentieth Century thanks to the Progressive Movement that progress was made toward achieving them. And aren't you contradicting yourself? They weren't achieved until the Progressive Movement, but it wasn't governemnt intervention that improved working conditions?



Exactly: they were demanding them before, and they didn't get them because they weren't economically plausible. The "progress" towards achieving them was not repeatedly demanding it, but wealth progressing to the point at which it was sufficiently economical. And, again, even then it merely transfers compensation from the form of salary to the form of safety, or extra leisure time.

I'm not sure what contradiction you think you see. If you're talking about the supposed "coincidence," it's perfectly explained both by the paragraph above, and by the last two you quoted, wherein I directly answer that exact question.



planet news's Avatar
Registered User
Of course capitalism increases standard of living, since standard of living is measured in capital. Every single transaction increases the standard of living. This is how capitalism works at its most fundamental level.

The question is not of standard of living. It is of what that means. Standard of living is simply capitalism's way of representing, of making sense, of a life. But what ABOUT that life. What does capitalism FAIL to represent of a life. This is the question.



Those are some pretty different questions than the ones I've been answering, but if you want my answer, it's that capitalism is not supposed to make sense of life, it is simply to create wealth. And wealth is not an end in and of itself; wealth allows us to decide what our ends and our life will be.

I seek wealth not to just have it, but because of the things it would allow me to do (or, for that matter, avoid): leisure to read, write, watch movies, help others, spend time with friends, play games, etc. Capitalism is the means, not the ends.



will.15's Avatar
Semper Fooey
Of course capitalism increases standard of living, since standard of living is measured in capital. Every single transaction increases the standard of living. This is how capitalism works at its most fundamental level.

The question is not of standard of living. It is of what that means. Standard of living is simply capitalism's way of representing, of making sense, of a life. But what ABOUT that life. What does capitalism FAIL to represent of a life. This is the question.
But it doesn't increase the standard of living equally unless government intervenes.

Workers were not enjoying the same standard of living as its employers.



will.15's Avatar
Semper Fooey
Exactly: they were demanding them before, and they didn't get them because they weren't economically plausible. The "progress" towards achieving them was not repeatedly demanding it, but wealth progressing to the point at which it was sufficiently economical. And, again, even then it merely transfers compensation from the form of salary to the form of safety, or extra leisure time.

Well, that is false. Salary improved as well as working conditions. There was no trade-off between the two.

I'm not sure what contradiction you think you see. If you're talking about the supposed "coincidence," it's perfectly explained both by the paragraph above, and by the last two you quoted, wherein I directly answer that exact question.
The changes came through government laws (i.e. intervention), which included laws which made unions stronger. It did not happen because owners suddenly became more generous (with one famous exception).



Keep on Rockin in the Free World
But it doesn't increase the standard of living equally unless government intervenes.

Workers were not enjoying the same standard of living as its employers.
nor should they.
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Well, that is false. Salary improved as well as working conditions. There was no trade-off between the two.
You're not getting it: the salary will be less than it would have been. Of course salaries go up over time anyway, in spite of this; just not relative to what they would otherwise be.

The reason is incredibly obvious: the cost doesn't just evaporate. When your job gives you more in benefits, you get less in salary. A job that spends more to guarantee safety will pay less than one that doesn't have to. All the requirements do, then, is deny people the choice of that trade off. I said all this before.

The changes came through government laws (i.e. intervention), which included laws which made unions stronger. It did not happen because owners suddenly became more generous (with one famous exception).
I'm literally positive there is more than "one famous exception," but it doesn't matter, because nobody has suggested that generosity is the cause. Competition is. If the labor is worth more, and the profits sufficient to pay more, then what's to stop any rival from stealing away their most experienced workers?

Profits serve a function. Either they are reinvested into expansion (which means more employment), or they result in better worker compensation, or else they invite further outside investment. This is, like, Capitalism 101.



will.15's Avatar
Semper Fooey
You're not getting it: the salary will be less than it would have been. Of course salaries go up over time anyway, in spite of this; just not relative to what they would otherwise be.

The reason is incredibly obvious: the cost doesn't just evaporate. When your job gives you more in benefits, you get less in salary. A job that spends more to guarantee safety will pay less than one that doesn't have to. All the requirements do, then, is deny people the choice of that trade off. I said all this before.

No, you're not getting it. Wages were repressed by management. When the standard of living improved mostly due to governmen intervention, and the example started by one guy, workers could aford to buy more upscale things, and that created more production and more prosperity.


I'm literally positive there is more than "one famous exception," but it doesn't matter, because nobody has suggested that generosity is the cause. Competition is. If the labor is worth more, and the profits sufficient to pay more, then what's to stop any rival from stealing away their most experienced workers?

It wasn't done because of competition.

It was delibertely done so workers could afford to buy what was being built, which of course create more demad for the product. It was a rare expampeof an entrepenuer thinking ousie of the box.

Profits serve a function. Either they are reinvested into expansion (which means more employment), or they result in better worker compensation, or else they invite further outside investment. This is, like, Capitalism 101.
Well, capitalism 101 is incomplete. See above



No, you're not getting it. Wages were repressed by management.
And competitors didn't take advantage...why? You're just skipping over all the arguments and questions and making the same claims over again.

When the standard of living improved mostly due to governmen intervention, and the example started by one guy, workers could aford to buy more upscale things, and that created more production and more prosperity.
I don't suppose you grasp how absurd it sounds to say that you make more money by giving money away so that people will have money to buy things (which may or may not be your product, anyway). See below for more elaboration.

It wasn't done because of competition.

It was delibertely done so workers could afford to buy what was being built, which of course create more demad for the product. It was a rare expampeof an entrepenuer thinking ousie of the box.
The "Buy Back the Product" argument is an economic fallacy that has been thoroughly discredited by Henry Hazlett (among many others). That's a link to a specific portion of his book, Economics in One Lesson, which is available freely online. You really ought to read at least some of it. I'll even be your sherpa, specifically linking you to the exact sections pertinent to whatever you're saying at the moment, though it's worth reading the whole thing.

Well, capitalism 101 is incomplete. See above
I'm afraid it's your understanding of economics that is incomplete, which is why these discussions almost always consist of you parroting some preexisting economic narrative and then avoiding follow-up questions.



will.15's Avatar
Semper Fooey
And competitors didn't take advantage...why? You're just skipping over all the arguments and questions and making the same claims over again.

Because they were all doingit. There are even many exmples of industry wide agreements involving price fixing. The free market doesn't work that well when governemnt is completely hands off.


I don't suppose you grasp how absurd it sounds to say that you make more money by giving money away so that people will have money to buy things (which may or may not be your product, anyway). See below for more elaboration.


The "Buy Back the Product" argument is an economic fallacy that has been thoroughly discredited by Henry Hazlett (among many others). That's a link to a specific portion of his book, Economics in One Lesson, which is available freely online. You really ought to read at least some of it. I'll even be your sherpa, specifically linking you to the exact sections pertinent to whatever you're saying at the moment, though it's worth reading the whole thing.

But it hasn't been discredited. He just makes an argument it has. If it was actually discredited, then his argument would be widely accepted and it isn't.


I'm afraid it's your understanding of economics that is incomplete, which is why these discussions almost always consist of you parroting some preexisting economic narrative and then avoiding follow-up questions.
You are the one going against the economic mainstream in these discussions.



will.15's Avatar
Semper Fooey
Man, is that argument skewed. Thoroughly discredited? No way. Read what Henry Ford did. I found an argument by some conservative trying to refute the living wage by claiming Ford did not raise wages so his workers could buy his cars, which contradicts what Ford himself said. That particular article contains a lot of misinformation. Did Ford do it solely for that reason? No. But he realized, which his competitors did not, by raising wages he increased loyalty, production, korale, and reduced greatly turnover so his actual costs were reduced for making a car. And I wasn't trying to tie this into a general argument for a living wage. But apparently a lot of conservatives think what Ford did is an argument for the living wage and must discredit Ford's motives for what he did, which at the time was considered to be beyond common sense by other maufacturers.



Because they were all doingit. There are even many exmples of industry wide agreements involving price fixing. The free market doesn't work that well when governemnt is completely hands off.
So why doesn't a new business come in and take advantage of such rampant inefficiency?

But it hasn't been discredited. He just makes an argument it has.
Did you read it at all? Do you understand the arguments? If so, what flaw do you find in them?

If it was actually discredited, then his argument would be widely accepted and it isn't.
Leaving aside the incredible implication that there's apparently no such thing as a widely held discredited idea (!), how exactly do you claim to know how widely held this idea is? Do you know of even one economist off the top of your head who disagrees, let alone a preponderance of them?

You are the one going against the economic mainstream in these discussions.
Your arguments about mainstream economics are invariably circular. You'll say that mainstream economists believe something. I provide you with economists who don't and who explain their positions. You then arbitrarily decide that they must not be "mainstream" economists. Thus, what what you call "mainstream" is just your own arbitrary grouping, not a dispassionate aggregation of views.