You know the old saying, "If it ain't broke, don't fix it"? I know something that's so broken that you don't want to fix it. In fact, it also works so well that you can't fix it. I'm talking about Capitalism. But before you denounce me as a Commie or Anti-American or just dismiss me as a kook, hear me out. More has been written about Capitalism than I could ever do justice to. And a lot of it is still very controversial. But a lot of it is pretty settled as fact. It's like the theory of evolution like that. (But of course who would dare put a sticker in economics book in the US saying "Capitalism is only a theory, not a fact"?)
Here's the thing: Capitalism describes a lot about the economic system of the United States. On any given day, you produce what you want to produce, you consume what you want to consume. The free markets moderate supply vs demand and the prices do what they need to all on their own. Sure, there are quirks on the individual level, but on the whole everything works out. But the dirty little secret is that the world economy is Capitalist. Even Cuba, a Communist bastion, is part of an unregulated world economy. And even within Cuba, Capitalism reigns, moderating the relative price of a chicken or of repairs to a 1957 Chevy. Money might not always be trading hands, but money isn't required for economics. It's just an intermediary product with a specific value.
So what's the controversy? Well, Capitalism doesn't work as a political system. It's not a political system. It can't be a political system any more than you can smell the color blue. You might have political systems that work well with Capitalism or you might not. But if you try to replace our Republic with Capitalism, you will end up with what is commonly called, "Anarchy". Anarchy, by definition is the absence of political authority.
Here's a recent example of something Capitalism doesn't work for. There is a potential for a severe flu pandemic in the next few years based on reports coming out of southeast Asia. Certain bird flus are being shown to have the ability to infect humans, and some scientists feel that strains found this year might be as virulent as the flu that wiped out between 25 to 50 million people at a time when the world population was only a third of what it is today. The best way to combat a reappearance of this disease is to eliminate it at its source - birds. But where is the Capitalist incentive to do that? Poor farmers don't get paid for birds they kill, unless their government intervenes (a Capitalist no-no). The idea of individual property rights would preclude outsiders from killing those birds. And in any event, it only takes a few infected people to start the chain reaction that would spread disease across the world at the speed of a 747.
Or here's another flu example. The majority of flu vaccine recipients are elderly, and why not? They're the most vulnerable to dying of the flu. But the vaccine is only 28% effective. "So what?" you might ask. "It's their money. 28% is better than nothing." All true. But did you know that it is more effective to protect grandparents by vaccinating their grandchildren? And not just their grandchildren, but all children. Kids, apparently, have a 90% effective rate of vaccination. And if you took the limited number of flu vaccines available and vaccinated kids instead of adults, fewer adults would get the flu. But where's the incentive? Vaccines are somewhat risky themselves. Parents don't necessarily like the idea of sticking another needle in their kids arms. Plus they can be expensive. And why should a parent spend the money to vaccinate his or her kid when the kid's risk of becoming seriously ill from the flu is very low in the first place?
The answer here is that Capitalism doesn't work for these situations because Capitalism has nothing to do with them. As human beings, we have recognized this fact for thousands of years, which is why we create binding associations. (We call them governments.) Capitalism is swell at selling excess flu vaccines. But if we want to protect grandma from the flu, we need government intervention. We need government intervention to kill sick birds in Indonesia. We need government intervention to vaccinate our children. What the government looks like is up to us. But one thing is for sure - it won't be Capitalist.
22 comments:
Who exactly is saying that capitalism is government, that you are arguing against? I don't think that, nor do any other free market types like myself. Obviously our government is democratic (well a democratic republic), not capitalist. Few deny the need for government to help out on problems like saving the world from avian flu.
The concept of democracy has led to freedom of choice for much of the world (with more coming), whereas the totally seperate concept of capitalism has allowed the human race to reach standards of living never before dreamed of. The two paradigms work together sometimes, and against each other other times, sort of a checks and balances system. Anyway, again, where are you going here? Are you trying to say we should do things differently, or just felt like ranting? I just want to know so I can take the other side :)
Besides the fact that I disagree with the general argument (you're effectively arguing that "My preferences are superior to other people's preferences ans thus should be the law of the land"), you're making a bad faith argument with respect to vaccination strategies and vaccine availability.
It is the government that recommended that
"Pneumococcal disease is a preventable complication of influenza infection, and this is an especially good time to be sure persons in the following categories receive the 23-valent pneumococcal polysaccharide vaccine:
* persons aged greater than or equal to 65 years
* immunocompetent persons aged greater than or equal to 2 years who are at increased risk for illness and death associated with pneumococcal disease because of chronic illness
* persons aged 2 years and older with functional or anatomic asplenia
* persons 2 years and older living in environments in which the risk for disease is high
* immunocompromised persons aged greater than or equal to 2 years who are at high risk for infection."
Your displeasure with the current system should thus be with the government for putting out what you report as misinformation. However, I would disagree with the inferences being drawn from the Harvard study because a) I prefer to save lives and the actual study focuses on the utility of youngsters < 3 for predicting outbreaks and b) nothing is said in the article of the relative effectiveness in terms of saving lives with respect to immunizing all the elderly (and dollar for dollar, immunizing care givers is the most effective route due to networking effects).
Returning to the relative efficiency of government (or expert) deployment of vaccine resources, the most recent flu vaccine shortage was a result of government meddling in the market:
"The role of government in driving down vaccine prices, and therefore profit margins that fuel continued R&D and attract competing manufacturers, is apparent throughout the vaccine industry. The standard flu vaccine has been made into a commodity product similar to generic drugs with minimal seller margins despite the clear difficulties in manufacturing and distribution. Taking advantage of the fact that injectable flu vaccines are not patentable, the federal government has become a large purchaser at low prices, and manufacturers are expected to sell at the same very low prices to clinics, hospitals, physicians, and pharmacies. The government uses its monopsony buying clout with no frills to extract the lowest possible price on the vaccines it procures--even when the target is an innovative vaccine under patent. Recently, a manufacturer's proposed price of $58 a dose for its pneumococcal vaccine was rejected by the CDC, which demanded a discount of more than $10 a dose.
All these market flaws have come into play in the flu vaccine saga. Buyers avoided binding contracts for supplies, and manufacturers had no incentive to produce extra supplies to hedge against disruptions. Hastily mounted trials have reinforced earlier studies that demonstrated a strong likelihood that supplies could easily be more than doubled by employing different methods to inject smaller, but still effective doses.[3] It is hard to imagine, however, that manufacturers feel free to charge the higher prices necessary to make such late adjustments and to promote what they had achieved."
A couple other tangential points...
There are indeed times when government is useful, most frequently when a "commons" cannot be avoided (national defense and regulation of air pollution come to mind). However, I am far from convinced that allocation of flu vaccines constitutes a commons.
You write: "We need government intervention to vaccinate our children."
Actually, all you have to do is convince parents that a vaccination is in the child's interest (which it is), then they'll pony up any cost. Perhaps the best course of action is to publicly put to rest the vaccines cause autism myths.
You write: "What the government looks like is up to us." To me this sounds like the words of someone who should be favoring the market allocation of vaccines because under a market the allocation truly is up to us and not some unelected, unremovable bureaucrat.
Honestly, vaccinating against influenza is about the most useless thing ever. First of all, the disease is unbelievably resilient and is constantly changing its genetic makeup so by the time the flu vaccine that was developed at the end of LAST season based on now-aged strains gets to you, the new strains don't really match up and you're not all that protected by the vaccine.
However, it is in the interest of all the pharmaceutical companies to scare the pants off of everyone about diseases and the like ("Ask your doctor if the little purple pill is right for you." Heaven forbid someone should jump on a treadmill and maybe alter their diet a little bit before going the pharmacological route), and convince them that they MUST be vaccinated because that is how pharmaceutical companies make their money. I'm not begrudging them their bottom line, but I do wish they'd find more creative, less-terrifying ways to go about it.
It's kind of like this guy my mom met recently who had her convinced that drinking regular tap water (tap water!) would kill you. It is no accident he was a salesman for in-home water coolers.
Even at its most extreme, the flu season never really kills THAT many people relative to the entire population of the country. I hate to sound callous about it, but in the scheme of things, vaccinating people against the flu is a losing proposition.
And Jody, doesn't everyone who makes an ideological statement inherently imply that "My preferences are superior to other people's preferences and thus should be the law of the land." I am certain you'd agree that this could be applied to loads of other current arguments such as oh...say...abortion rights and gay marriage.
doesn't everyone who makes an ideological statement inherently imply that "My preferences are superior to other people's preferences and thus should be the law of the land."
That's the beauty of a free market, you can't force your preferences on anyone else by making it the law of the land. (maintaining a free market also requires government action - contract enforcement, cartel busting)
Of course as ben points out, capitalism (or the free market) isn't a form of government, but libertarianism is. (conceptually very similar)
However, back on topic, I'll be more explicit in what I meant. Scott is saying he prefers outcome X to outcome Y. Scott states that X is superior to Y for little other than the fact that he prefers X to Y.
Substituting the actual discussion into the abstraction, I say "little other" because there are several other metrics that could be used to justify leaving the system as-is (or tweaking it) versus mandatory vaccinations for toddlers (Scott's position).
Suppose instead of using transmission as the metric, we use minimizing government coercion. Then status-quo wins out. Suppose we use minimizing deaths, then I believe mandatory vaccinations for health care workers, the elderly and infirm win out. Suppose we choose minimizing public cost, then a purely private scheme wins out.
Solving even this problem (mmm... multidimensional optimization) is quite complex and the preferred solution would vary significantly from person to person. In such a case, allowing people to choose for themselves is generally preference maximizing given a fixed amount of resources.
Your displeasure with the current system should thus be with the government for putting out what you report as misinformation.
I am displeased with quite a large number of things, and the government happens to be near the top of the list for many of those things. That, however, is completely beside the point. Whether or not the government is making bad recommendations, my point was that market forces are just as inadequate for the job of protecting Americans from the flu as they are for protecting Americans from Al Qaida.
Even at its most extreme, the flu season never really kills THAT many people relative to the entire population of the country.
ORF, In a normal year, you're right. However, in 1918, the flu wiped out 1% to 2% of the world's population. That was in a time when people could not fly from New York to Moscow in 11 hours and the population of metro Atlanta was only 1/6th of what it is today. If a strain like that one hit today, 130 million could be dead in a month.
Actually, all you have to do is convince parents that a vaccination is in the child's interest (which it is)
Ahh, but it isn't. Children recover from the flu remarkably well. But as any grade-school teacher can tell you, they also pass on their germs even more remarkably well. Children will most likely survive a severe flu strain, but in the process, they will kill their teachers, their grandparents, storekeepers, and anyone at risk they come in contact with. Vaccinating the elderly barely protects them. Vaccinating children does a much better job or protecting the elderly. So explain to me where the "market forces" are that would encourage parents to pay for vaccinations for their kids?
Scott states that X is superior to Y for little other than the fact that he prefers X to Y.
Jody, you never defined X and Y, but I'll run with this. In my original argument, X was people living and Y was people dying. Yes, I prefer X to Y, and I consider it a core function of government to make sure X happens. Just like the examples you gave, national defense and regulation of air pollution, public health is an issue that does not respond well to market forces.
BTW, you said, "Suppose we use minimizing deaths, then I believe mandatory vaccinations for health care workers, the elderly and infirm win out.". The whole point was that the NIH figures show that vaccinating children is much more effective at saving lives than vaccinating the elderly, because it lowers the chance of adults being exposed to the virus.
Capitalism is wasteful and corrupt. I lean more toward socialism, but not pure socialism. A mutt economic system should prove to be more stable.
While I was over in Scotland, which has a hybrid socialist/capitalist market, I never really felt like I didn't have choices. I could tell that the people were generally happy with the system, feeling that it was fair and served the majority of the people.
As far as the flu goes, I used to get the flu about twice. It would last about three weeks or longer each time. Since I started getting the shots 8 years ago, I haven't gotten it nearly as badly as I used to. So even if the shot doesn't totally keep me from getting the flu, it does reduce the intensity of the flu that I get. That makes me think that the elderly SHOULD get the shot, because if the kids getting the shot will still get the flu, then they can still pass it on to their grandparents.
I find it interesting that rudimentary free markets (aka capitalism) in China, where the flu originates (generally), are widening the gaps between poor rural China and wealthy (relatively speaking) urban China. While the rural folks in China muddle through the squallor of their lives, not seeing a dime (or the Chinese equivalent of a pittance) of the prosperity of the city, they are doing so in the company of vast amounts of filthy geese and pigs, incubating ever more virulent stains of influenza in the process.
So I guess what I'm saying is we need to nuke China. Now. Right away.
Or convince them to abandon capitalism and be communists. And then nuke them.
Not to say I'm an expert, but I've been reading up on the flu, and while the point is still controversial, a growing number of researchers seem to think that most of the flu deaths int he 1918 epidemic were caused by TB and other diseases that the flu opened up the immune system for. Most, of not all, of the ancillary diseases that actually caused the deaths would not kill people today if they got a modicum of medical care. WHat that means for us is that an avian flu outbreak might kill a lot of third world people, but the U.S. would just get the sniffles for a few days.
Sylvana, when were you in Scotland? My understanding is that they have verged from their more socialist ways the last few years to avoid the sinking ship that is the rest of Europe, and they now have one of the strongest economies on the continent, because of the move towards more free market capitalism.
Tangential to what ORF was saying, overall everyone would live longer and be healthier if people ate less and exercised more (in developed countries, of course). There's no better medicine for reducing heart attacks and many other problems.
This is a cool discussion, one of my favorites here so far.
Ben, I was there last year. I took a Scottish culture & politics course while I was there and they were very adamant that they were mostly socialist with only some capitalism. They actually have been getting stronger as a market due to taking more control of themselves from England. More of their resources are remaining in their country instead of being funnelled into Great Britain as a whole. They are also very country proud. "If it's not Scottish, it's crrrrrrrap!" So they tend to buy Scottish goods, keeping even more resources in their country. All of these things seem to be working out just dandy for them.
The problem is that capitalism is supposed to reward talent, not power. In America, we are marginally capitalistic with a heavy dose of power trumping talent and productivity.
Traverse City Attorney
Sylvana,
You seem to have missed something called the Barnett Formula. It’s a mechanism for Government spending by which the English taxpayers subsidise the Scottish citizens.
I also think the basic discussion here is mixing and matching things a little to much. Capitalism and free markets are not the samething and identifying that in such free markets there can be either market failures or perverse incentives is not really all that new a thought.
Neil,
Something of a mish mash here, many of your points have been decisively refuted elsewhere. Your points in favour:
1) Note the if. If it can be made secure. Something that no one actually believes it can be. Likethat Microsoft bloke last week and every programmer I’ve spoken to on the subject.
2)Biometric passports. The actual thing we have signed up to internationally is that there will be a machine readable version of the current photograph on the passport. That’s it. No fingerprints, no iris or face recognition. The Australians are implementing this for 8 pounds a time. And there is nothing at all in the passport regulations that require the National Register.
3)Organised crime? You mean ID cards will solve drug dealing? Pah! Identity fraud? 50 million a year? Very wise to spend 18 billion to crack that nut, eh?
4)90 million through the ports? I think you mean airports as well. But visitors, non-resident Brits will not have to have the ID cards. The only thing they will indeed have to have is the machine readable photo on their passports. This is not an argument for ID cards.
5)Do you really believe that after spending 18 billion it will be left to be voluntary?
I do realise that as a member in good standing of the Labour Party you feel you have to support whatever is being proposed by that party in Parliament but I’m afraid you’ll have to do better than this to persuade the rest of us.
A friend of mine (philosophy professor) has this to say about capitalism:
http://www.friesian.com/capit-1.htm
Regarding Karl Popper, please note that George Soros studied under him.
Well, excellent point. just another reason why governments should stay away from economy - they would have more time to solve problems like Avian Flu
Or even better let's abandon Capitalism system altogether, because it doesn't solve a problem of Avian Flu. Don't you think Captialsm is "somewhat" useful for many other problems. Let's destroy all the engines in the world bacause engines don't solve a problem of teenage pregnancies.
scott - you're right on so many levels it's not even funny. capitalism doesn't work. and the fact that some people are actually convinced otherwise is unbelievable. for those of you who haven't yet removed the blinders from your eyes, here's why capitalism doesn't work.
capitalism, by definition, is an economic system in which the free market forces of demand and supply determine prices without interference from the state. when the state must interfere, capitalism hasn't worked as it should. there isn't a capitalist nation in the world today in which its government hasn't interfered with price in its free market economy out of necessity. so how can we say that capitalism works? really and truly that should be the end of this whole argument. but i can see those hardcore capitalists shaking their heads right now.
here's the problem with capitalism. its incredible in theory, but when applied socially (ie to the real world) it flounders.
a perfect example of this is the fundamental capitalist argument that within a free market system every citizen has an equal opportunity to attain wealth. in the real world, however, social forces such as racism or sexism, for example, do not in fact afford everyone the same opportunities.
still not convinced? well lets consider negative externalities, defined as a transaction between two parties that affects a third party not directly involved in the transaction. cigarettes are a great example. a smoker buys a pack of cigarettes for a price pocketed by the shopkeeper. life is great for the two parties involved, but a third party contracts lung cancer from the smoker's second hand smoke. so what does this have to do with capitalism? what if you're that third party and, as per the example above, you're subject to social forces which prevent you from attaining the same wealth as others? as follows, you can't afford the same quality of health care as others and you therefore stand a lesser chance of surviving your illness. so, how well has capitalism served you?
indeed, one needs to consider the force that drives all in the capitalist economy - that is, the quest for the almighty dollar. putting this profit motive first, ahead of the greater social cause, is the reason behind our declining health, the increase in terminal illnesses, animal extinction, a polluted environment, poverty, homelessness, a compromised eco system - it is the reason why we in developed nations worry about the latest products on the market which we should or shouldn't buy, while those in less developed nations worry about whether that nike factory will round their pay up to the nearest penny.
those of you who defend capitalism with a passion really need to take a good long look at the world around you. equally as important, remember that opening comment about removing the blinders from your eyes? try to understand why you have such strong views about the virtues of capitalism. where has it come from? why is it that children as young as four or five interpret and use the word "commie" as an insult?
so, am i a commie? no. in fact, i'll be the first to concede that capitalism has its merits. am i a capitalist? well, we all are. we live in a capitalist world and we need to play by the rules to survive. but i know capitalism isn't right. and as you said scott, maybe it's so broken we don't want to fix it, and maybe it works so well that we can't fix it. but i hope to god you're wrong.
peace.
when the worlds resources run short in about 30 years time (maybe sooner at the rate we are consuming) then goverments or preferably the people will take control to help save the weak from the "natural" tendancy of the strong to survive no matter what. If you look at the current debate on climate change you will see that most of the loadest comments against global warming comes from the leaders of countries that have the most to lose financialy. ITS ALL ABOUT Money AND POWER and if we dont sort it out sooner rather than later then the only people who will be sitting prety are the ones who can afford to move to the higher ground and have a small (or large) army to protect them from those who are left.STOP THINKING ABOUT YOURSELVES AND BECOME PART OF THE HUMAN RACE, ITS NOT ABOUT WHAT YOU OWN OR WHAT YOU CAN PRODUCE, ITS ACTUALY ABOUT BEING HAPPY IN THE WORLD AND LEAVING IT AS YOU FOUND IT. How many people can actualy say that, how many of us can say that wen we die we do indeed leave the world in a better state than we found it. If you can truely, as a capitalist, put you hand on your heart and say that the world will be better for what you have done (balance it all up. not what good you think you have made but actual good compared to the harm you have done to the worlds resources and the whole planets population) and if as a capitalist you say it is a betterplace then you are a bloody delued liar.
You guys are missing the point, whats important is that capitalism IS DEHUMANIZING, it makes something that is not real seem like it is soo right. However when you make decisions based on something that is not real you lose sight of what is real. e.g- nestle chocolate is indirectly causing people to die, because of horrible working conditions. But the money they make from it, and the simple reason that it is going to happen anyway, okays this decision. However if everyone does it eventually mass amounts of people will be dieing because more and more companies join on to this tactic. Do you understand? Money is the root of all evil, not because of it, but what it does to people.. There can only ever be one total amount of money, so half the world will have money and half will not. Therefore half of people fight to keep it and the other half fight to get it.... EVERYONE FIGHTS. Its quite sad actually.
All you have to do is look out your door to realize that Captilism doesn't work.700 billions dollars are being funneled into our businesses by our government to keep our business afloat.Deregulation in the 90's which allowed for more capitlism in our country allowed this. We would have been alot better off creating social programs like the healthcare plan that has just come out. The problem with Capitlism is you can't count on people to do the right thing. There is always going to be someone willing to sell their our grandmother to make a dollar, or loan you money, then hike up the interest so you cannot pay, then foreclose on your home.
There has to be regulations, which would lean toward socialism or communism, but there cannot be communism by definition until there is such an abudance of surplus and wealth that it has to be distributed evenly amongst everyone.
Capitalism doesn't work for the reason Scott noted, essentially that it doesn't monetize certain forms of work well. This could also include road repair, as there is no profit in it but it desperately needs to be done. So instead all we have are underfunded highway repair organs at the local level which are far from being up to the task.
There are other reasons why capitalism doesn't work. Here's my favorite: Because it doesn't work for the AVERAGE PERSON. Remember, the vast majority of Americans aren't billionaires or investment bankers or even small business owners. The vast majority of Americans sell their labor piecemeal and are paid a fraction of its actual value. In other words, we're exploited, just in varying degrees from the overworked white collar worker to the underpaid migrant worker planting shrubbery. You see, you can't have capitalism WITHOUT exploitation of the many by the privileged few. You can't have capitalism without the greed of those privileged few and without their heartlessness and willingness to take advantage of their fellow man and woman. A system that revolves around greed and the ripping off of the average worker for the benefit of the wealthy few is certainly not the pinnacle of human development, not even close. Capitalism is wage slavery. Humanity can and will do far better.
Some say socialism offers no incentive to work harder. I say what could offer the worker less of an incentive than a system like capitalism where the average worker sees no difference in his paycheck if the store where he works does 2% or 20% more in sales this quarter? This and insultingly low pay rate that is the norm under the capitalist economic model are more than reason enough to abolish it and transition toward worker ownership of the means of production. Think about it. This is the only way that workers will be paid what their labor is worth and the only way that workers will have some kind of a stake in the success of their business because they would be a part-owner.
Others have pointed out that capitalism is not democracy because it is of course an economic model rather than a political system. This is correct. What they neglect to point out is that capitalism is inherently INCOMPATIBLE with genuine democracy. A great case in point is the U.S. government which, let's be honest, from any objective estimation is just a big sock puppet of the billionaire ruling elite. Senators, Reps and the president himself may as well have their corporate sponsors' logos on their suit jackets like race car drivers. Anyone we are allowed to vote for is guaranteed to be someone who will maintain the status quo and won't make any meaningful changes. Because that is simply all that the wealthy will finance. They aren't going to cut their own throats and force themselves to flee to the Caymans with a steamer trunk full of money to start a new life. Instead they buy out any candidate that has a shot at winning and let the puppets fight it out among themselves to see which will be the best puppet of the elite. Look at Obama if you don't believe me. Campaigned as Mr. Hope and Change, Mr. New Way of Doing Things and what do we get? Someone who governs from a place that is shoved so far up the rear end of Wall Street that Obama poops out stock ticker tape. And gives us a health care "reform" package that is the dream of the private insurance companies and Big Pharma but still makes people's grandmas choose between food and medicine and makes poor people who can't afford insurance buy it from private insurers. If all we could choose between was John McCain and the Wall Street whore Obama, that's not democracy or even close to it. It's a pseudo-democracy where people go through the motions and carry out the rituals of democracy to keep them complacent and feeling like they have a voice in the process. That's it. Why is it this way? Because the uber-wealthy capitalist bourgeois elite controls the whole process by controlling all its players. Period. Capitalism is a poison for democracy.
Capitalism essentially puts the profit motive above all else including fairness, people's health and safety and the environment. All that is a distant second to the bottom line.
Capitalism should be seen for what it is, an INTERMEDIATE stage in human development between ancient feudal absolutism and the future, worker state democratic proletarian socialism. People from the future will look back and wonder whatever took us so long to get there when it couldn't be more obvious that capitalism is soul-crushing and so self-evidently destructive to the average person. The future looks bright and beautiful. It just doesn't in any way involve capitalism.
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