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A Second Look At Capitalism

Rebroadcast: originally broadcast April 10, 2013.

A big second look at capitalism. How it’s worked over time.  How it hasn’t. And whether it’s run its course.

"Capitalism Works for Me!" by Steve Lambert (Flickr, SPACES Cleveland)

“Capitalism Works for Me!” by Steve Lambert (SPACES Cleveland/Flickr)

For decades in the Cold War and before, the American conversation on capitalism was pretty well frozen.  What do you want?  Capitalism or Joseph Stalin?  Capitalism or Cuba?  Then the Cold War ended and capitalism got the field pretty much to itself.

Off came the regulations and on came some high times, then, eventually, the crash, the Great Recession.  And all kinds of questions.

A new generation of thinkers is looking hard at capitalism again.  Where it’s been.  What it’s become.  How it’s working – or not.

This hour, On Point:  a big second look at almighty capitalism.

-Tom Ashbrook

Guests

Julia Ott, assistant professor of history at The New School, co-editor of the Columbia University Press series “Studies In The History Of U.S. Capitalism” and author of “When Wall Street Met Main Street: The Quest For An Investor’s Democracy

Louis Hyman, assistant professor in the Labor Relations, Law, and History department at Cornell, founding editor of the Columbia University Press series “Studies In The History Of U.S. Capitalism” and author of “Borrow: The American Way Of Debt” (@louishyman)

From Tom’s Reading List

New York Times “A specter is haunting university history departments: the specter of capitalism. After decades of ‘history from below,’ focusing on women, minorities and other marginalized people seizing their destiny, a new generation of scholars is increasingly turning to what, strangely, risked becoming the most marginalized group of all: the bosses, bankers and brokers who run the economy.”

Excerpts

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  • tbphkm33

    I debate if it is not as much capitalism itself as it is the current era of crony capitalism. Of mega corporations creating virtual monopolies. Look at the U.S. cell phone market, sure there is “choice,” but when the consumer looks closer, there really is no choice. They are all the same shade of vanilla, all geared toward the corporation’s bottom line at the expense of everything else – including at the expense of the consumer and society. That is the reality of the modern U.S. flavor of capitalism.

    The U.S. does not need more regulatory oversight, it only needs smart regulations. The revolving door between industry and government regulatory agencies has to be shut. The industry monopolies have to be broken. The focus needs to be on developing a sustainable economy and forcing business to pay their fair share in that economy. We have to turn away from the short-term focus on profits, and see business as a long-term strategic endeavor that, properly managed, benefits all of society.

    • HonestDebate1

      It wasn’t that long ago when we had only 3 television networks and Ma Bell for phone service. Capitalism gave us many many more choices.

      • J__o__h__n

        Who intervened to break up Ma Bell? It wasn’t the market. We need more trust busting. We have more networks but how many cable providers who are actually in competition?

        • HonestDebate1

          It was the government who created the regulated monopoly and the government who broke it up, Reagan I think.

          If success depends on the choices of free men then competition is the effort to satisfy the most consumers. There are winners and losers but it’s the choices that are important. Capitalism creates choices.

          • Ray in VT

            Reagan didn’t break up Ma Bell. It just happened on his watch. The anti-trust case against AT&T began way back in 1974.

          • HonestDebate1

            Thanks.

          • Ray in VT

            No problem.

          • 65noname

            no it doesn’t; it creates a mechanism to limit our choices

        • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

          If you want a better cable provider, you can always move.

          (I’m kidding. But I won’t bet you a beer that some “freeman” somewhere hasn’t made that argument.)

      • PithHelmut

        And what else could possibly matter!

      • 65noname

        capitalism didn’t give any of that; science created it and capitalists exploited it at the expense of us.

      • tbphkm33

        True, but has it turned out to be such a great deal? Now we have 17 iterations of the same cooking reality concept. Plus, families used to have one communications bill, the landline – today the average family has a landline, cell phone(s), cable/satellite, Internet service, and often a streaming TV service. Result is that the communications aspect of the average households budget has risen by 10 to 15 times. From some $30 to $300-$450 a month. Now, lets not fool ourselves that wages has risen in proportion.

        Its must-have capitalism. The average person is aghast at trying to get rid of any of these service, yet at the end of the day, has quality of life improved? I would argue not, quality of life probably has, if anything, gone down. People’s hamster wheels are spinning faster than ever.

    • Don_B1

      It is true that the need for regulation probably runs more on the path for smarter regulation than “more” regulation, but when new activities are developed, they almost always have components that need “new” regulation.

      Consider the development of hydraulic fracking, where the chemicals used to keep the shale rock open for the gas or oil to leak out are kept secret with potential devastating consequences for those using the water and air in the vicinity of the well. There are legitimate reasons to regulate that and other aspects of the fracking process.

    • TheDailyBuzzherd

      tbphkm33:

      True. Until this changes, capitalism will exist in name only.

  • Yar

    I grew up on the stories in the excerpt. My dad born in 1929 to a small town grocer of a general store on the edge of town. Barter was the basic unit of trade. His parents, both who worked the store, would buy hams, eggs, vegetables from the country folks, for cash. The country folk would continue to town with their “pay”, to pay their taxes and on the way back home they would stop back in the store to buy staples such as shoes or tack and vinegar, salt and spices. The cycle was completed by towns people, the teachers, factory workers, who ordered goods from the store, and were delivered by panel truck. They did same day delivery with a three digit phone number. My grandfather said that teachers and railroad workers kept him in business through the depression. It was a closed system. The feed back loop of economics worked for many but still had its problems. The farm I live on was purchased in 1935 from a bank foreclosure. Debt sorted people into exploiters and exploited. We are all part of the system, and the further we remove ourselves from basic barter the closer we get to the true exploitative nature of unregulated capitalism. My Grandfather left the store business because he saw the pain inherent in the system. Kids would be hungry and he would have to make the decision to feed or not feed families knowing his choices determined the food on his own table. The credit ledger has a history of the community written all over it. Who would drink themselves to death, who made good on their parents debt, or who burned their house for insurance money. They had the first phone, electricity, a truck, a mill to grind corn, the general store was the center of the community. Pulaski County Ky, was the number one egg exporting area in our country. Trains would take eggs to Cincinnati and on to New York. Egg money was really a form of currency. Barter kept many closer to the cause and effect of monetary policy. Debt was for the most part local. More on debt in part two.

    • Yar

      Part two, What is debt in a closed system? Personal debt is different than national or world debt. All the time we hear political leaders say the family has to balance its books and so should the country. When you die your book is balanced, dust to dust. A country on the other hand must invest in the future to survive. Education, infrastructure, civil law, a system of justice all play a role in allowing people to continue to trade work over time. Money in the bank, we hear that phrase over and over, when it really never was or is true. If we had only put more money in the bank then social security and medicare would be solvent. National economics doesn’t work like that. Money only has value when people have skills and do something productive. Mining coal, drilling for oil, growing food, these are the basic products that have kept our economy growing for the last 160 years.
      The energy from this activity, built the railroad, the transportation system, allowed the innovation that created consumer goods, allowed people to move off the farm and to the city to make “money’.

      It is said the world owes close to 60 trillion dollars. 8600 dollars each doesn’t sound bad to a middle class American, but with over half of the world living on less than 2 dollars per day world debt is an imaginary number. World debt is a fiction, except when talking about the unequal costs of climate change, or war, or how exploitation eventually comes back to plague the exploiter. Our fears are that our debt will be settled. Isn’t that the basis of the Lords prayer? That our debts be forgiven. We (Americans) don’t really want a true accounting of our debts.
      Part three, promises broken!

    • Yar

      Part Three, Broken promises. I often wonder if the last housing bubble popped with the crack down on illegal immigration. Every pyramid scheme collapses when it can’t sustain the required exponential growth. Ponzi couldn’t quite grasp this practical limit. Growth is never sustainable, death and a return to the soil are part of the cycle of life. Biological systems grow unless conditions limit growth, uncontrolled growth in biology is cancer.
      The next generation of workers always bears the responsibility to support the retirements of the last. The connection we have across generations is part of the cycle of economics. Money has value when traded for work, for money to retain value we must trade work over time with the next generation. Innovation and education should allow (work) money to gain value over time when invested in education and productivity. Instead of investments gaining in value, they are churned and the value of the original work is extracted by the market. The market doesn’t retain value, it only trades value between investors for a fee. The financial industry is a tax on the flow of money. This system has funded our political structure, which supports the current ‘broken’ market system. A crash is unavoidable without change. We are a wealthy nation, we have resources, we can take care of the baby boomers in retirement, we can educate our youth. We can pay a living wage and provide healthcare for the people who work to put food on our table. All of this requires regulation. Even the most selfish person on the planet should see it is in their self interest to do these things? It is keeping the cross generational promise, work while you can, then you will be taken care of when you are unable to work. That is the definition of civilization. Anything else is law of the jungle, and is the definition of unregulated capitalism. When civil law breaks down, money loses all illusion of value. The cycle busts, and there is much wailing and gnashing of teeth.

      • Steve_the_Repoman

        I had the pleasure of speaking with a very gentle and multi-faceted gentleman from Pakistan yesterday evening.
        In addition to being a farmer, mathematician, and computer scientist, he has been working the last six years on a history of Pakistan.
        One of his premises began with the rich natural resources, agricultural fecundity of the land, geographical advantageous trade routes, and a well educated populace that naturally should make his nation among the richest in the world.
        The results:
        -decades of war and
        -a fragmenting society bent on
        destruction of the other.
        Among his causes:
        -a ruling political class gone mad and
        – the global chess game played by the
        global super powers of the moment.

        I admire your thoughtful analysis.

  • Ed75

    Then Pope Benedict wrote an encyclical on the economy in 2009
    (‘Caritas in Veritate’ –
    http://www.vatican.va/holy_father/benedict_xvi/encyclicals/documents/hf_ben-xvi_enc_20090629_caritas-in-veritate_en.html)
    reiterating Church teaching. In rough sketch capitalism with appropriate regulation is the best system available, as long as the end of economy is recognized as not the system itself, but the good of the human person. (The popes from 1850 on pointed out the problems of socialism.)

    • Don_B1

      I hope “the good of the human person” was the general good of all in the society, not just those who already have a lot of wealth.

      • Ed75

        Yes, it is of everyone in society. It’s interesting how the Church gets the rap of supporting the rich. The Church puts its money in the two places Jesus is found first: at the altar (so the beautiful churches), and in the poor. As an outpouring of its faith and love it runs more institutions for the poor across the world than any other institution. But it gets this rap.

  • MadMarkTheCodeWarrior

    Today’s capitalism is greed run amok; with citizens united politicians are owned by big money and they will vote any way they are told regardless of the consequences for the folks that voted for them. Politicians, like race car drivers, should be forced to wear suits with the emblems of their sponsors: the largest contributors get the biggest emblems.

    This is not democracy, it’s now cleptocracy.

    • thequietkid10

      that’s not capitalism either. If you have a government that is powerful enough, that there is an incentive for corporate interest to buy them off, then you don’t have a capitalist system.

      • Don_B1

        If the government is NOT STRONG enough, then the wealthy can dominate the whole economy, just as feudal lords ruled over the earlier agrarian economies.

        There is no panacea in “small government.”

        • thequietkid10

          The feudal lords were the government. They were the ones with the guns (or the swords for that matter), they were the ones who made the rules.

          The difference between a crummy boss and a crummy government, is that it is a lot easier to find a new boss, then it is a new government.

  • Irv

    Capitalism is alive and well… doing exactly what it was meant to do. It takes from the poor and gives to the rich.

  • HonestDebate1
    • Andrew K

      I liked the video, however, I think the major difference between
      what is happening now and what happened during Henry Ford’s time is that
      workers are being replaced by technology. Once Ford created the assembly line
      he needed people to man the line. Now the role of workers and their wages are
      being diminished while profits continue to increase for the owners of capital.

      I think the first rule of investing applies, “This time
      everything is different.”

    • Don_B1
      • HonestDebate1

        I’ll take Friedman, you can have Krugman. If you are going to ask me to read that garbage (and I did) then please give me something that is relevant to what Friedman said. Do you have a comment on what Friedman said regarding capitalism?

    • hennorama

      1Nastee Hotbed – Notice how Mr. Friedman never actually answered the questions posed by Mr. Donahue, as to whether Friedman “ever had a moment of doubt about capitalism, and whether greed’s a good idea to run on.”

      Friedman’s first responded by asking 4 questions of his own, followed by a brief dissertation. His later response included 7 additional questions and not a single direct answer.

      So much for “honest” debate.

      • HonestDebate1

        Do you have a comment on what Friedman said regarding capitalism?

        • hennorama

          Test1…Bonehead – TYFYR.

          Yes. It’s unfortunate that Friedman felt that he needed to be evasive in his defense of capitalism. If the case for capitalism was so strong, why not answer the questions directly?

          “Schoolmarm Says”: Capitalism has many flaws, but it is better than everything else that’s been tried.

          That declarative statement would have been a far better response to the questions than Dr. Friedman’s evasive tactics.

          • HonestDebate1

            I liked his answer and was very clear about what he was saying. Donahue was satisfied too. I disagree 100%, it was a beautiful response. He did not accept the premise. He did not take the bait. There were no headlines in the liberal press the next day that screamed, “Milton Friedman denounces capitalism”. The entire show is on youtube. Look it up.

            So now you are telling Milton Friedman how to conduct himself, that’s rich… and typical of a schoolmarm. If you had the transcript on paper I’d imagine you’d take a red pen, write in the margins and grade it.

          • hennorama

            Stone Head 1 Bet – TYFYR.

            As Dr. Friedman is still dead, one cannot tell him how to conduct himself. A demerit for a false premise.

            As Dr. Friedman did not answer either of Mr. Donahue’s questions, characterizing his responses as an answer is inaccurate. Another demerit.

            I did not indicate in any way that Friedman “denounce[d] capitalism.” Another demerit.

            The demerits are piling up.

            Allow your imagination to run wild, sir. For example, try to imagine which finger might be wagged in your direction. But don’t think about a zebra.

            TYAFYR.

          • HonestDebate1

            I see now, it’s a comprehension problem.

          • hennorama

            Stone Head 1 Bet – TYFYR.

            You are to be commended for admitting your problem. That’s the first step to resolving it.

            Are you planning to use the nearby resources, which you can find here?:

            http://abspd.appstate.edu/sites/abspd.appstate.edu/files/EBRI%20Resources%20Comprehension.pdf

          • HonestDebate1

            Evidently you didn’t comprehend yet again. BTW, our farm teaches classes for App., it’s not the other way around.

          • hennorama

            1 Beat Shoe Dent – TYFYR.

            Sorry to read that you are unable to maintain your election to admit your problem, and that you’ve reverted to your natural state of (flip)floppiness.

            Why do you feel the need to discuss the Federal Election Commission’s activities? Do you believe I’m not aware of the FEC’s educational mission?

          • HonestDebate1

            Federal Election Commission????? You get bizarrer and bizarrer.

          • hennorama

            Doesn’t the acronym seem familiar?

  • Jon

    I agree with Marx’s diagnosis on capitalism however not his
    prediction of socialism thereafter. The ending of capitalism looks more like simply bankruptcy of the state and going back to Hobbs state of the nature – just same as capitalism in philosophical principle with least regulation – libertarianists ultimate paradise.

    • Don_B1

      If the growth of income continues to go to those with capital rather than workers, the capitalists will do in spades what they are beginning (for the last 30 years or more) to do in grabbing the levers of political power to carve out monopolies or other rent-seeking activities for themselves until the “democracy” enjoyed today is a complete plutocracy.

      I guess that is “libertarianism for the wealthy” and serfdom for everyone else.

  • alsordi

    The Wall Street Bail Out was not capitalism.

    The private bank (the Federal Reserve) creating money to pump up the stock market is not capitalism.

    Pure capitalism can never be attained. The closest example being trading yams in primitive villages of New Guinea.

    Capitalism is a ruthless, wasteful, corrupt and violently self-destructing concept.

    • thequietkid10

      when you say pure capitalism are you talking trading yams in New Guinea or what we have now?

      • alsordi

        If the west keep on going as it is, we may all be trading yams in the near future.

  • sickofthechit

    Until there is some actual ownership of the companies they work for by the hourly workers, capitalism is doomed to be nothing more than a vehicle to further separate the “haves” and “have more” (as “W” lovingly called them) from the “have nots”. Capitalism as it is practiced by the majority of companies here in the U.S. is soul-less and fails to recognize we live on a limited resource in the middle of nowhere. charles a. bowsher

  • Art Toegemann

    Capitalism is under attack not by socialists but by a CEO culture that embezzles the capital instead of keeping it in the business. The current disparity between wage earners and CEO compensation is astronomic, new, and can only be short lived. Business administration has become nothing but bankruptcy and incompetence for the sake of CEO immediate gratification.

  • vito33

    Economist Richard Wolff would have been a great voice to have on this program.

  • John Cedar

    “The misery of capitalist exploitation is not half as bad as the misery of not being exploited by capitalism”

    The oligopoly is barley one step better than the monopoly.
    There seem to be an assumption on both sides that capitalism does not exist unless it is laissez faire. For some reason in these type of discussions, the economic system always is tied to the political system. I suppose if you lose your property ownership rights there are only a couple alternatives.

    But much of the criticism of capitalism is about the false premise that the middle class and poor don’t have enough stuff compared to yesteryear, that they are the have-nots even though they have more stuff than ever before. When in fact most of what they don’t have is not “stuff” but other intangibles and is the result of illberalism.

    • pete18

      Great quote, who said it?

    • http://commentaramapolitics.blogspot.com/ tryanmax

      I concur, who penned the quote?

      • John Cedar
        • http://commentaramapolitics.blogspot.com/ tryanmax

          Yay, snark!

          Some people like to be asked what they know. Not all people, but some.

          • John Cedar

            Hee hee..I knowwwwww… I like that let me Google that for you site.

          • http://commentaramapolitics.blogspot.com/ tryanmax

            I know, I’m totally going to use it now.

  • https://www.facebook.com/kyle.rose Kyle Rose

    I’m curious which “capitalism” they’re going to be talking about. If they’re talking about rent-seeking, big business, corporate welfare, government protectionism, elites-vs-consumers “capitalism”, then I would say it’s actually a complete failure.

    Where we part ways is on how to remedy the situation. Progressives identify many of the same problems that agorists/anarchists/libertarians do, but they seem to misidentify the root causes (such as “unfettered capitalism”, as if such a thing even exists in our hyper-regulated and distorted markets), and as such propose remedies that actually wind up making the problem worse (such as additional “regulation”, which mainly winds up reinforcing the position of established market entities).

  • toc1234

    Is it really capitalism that’s the problem for many people? or it is their own life choices? and its easier to blame something nebulous like capitalism i/o taking a good look at their life choices.

  • https://www.facebook.com/kyle.rose Kyle Rose

    To wit, Republicans and the libertarian right (e.g., Reason, CATO, Randians, etc.) still defend companies like Walmart as if such a company could exist in its present form in anything like a free market, without subsidies and special deals from localities. The libertarian left (by which I mean agorists and organizations like the Center for a Stateless Society) understands the dynamic of rent extraction and how integral the cooperation between big business and government is to the perpetuation of the status quo.

    Nobles or the 1%; serfs or consumers. The differences are surely great by virtue of the much greater overall wealth in the world today, but the power dynamic is roughly the same. It’s the power dynamic between the two classes (the political class vs. the rest of us) that has to change before liberty can be realized. Red vs. Blue is just a smokescreen.

  • Prairie_W

    Sure, capitalism is wonderful. Until it isn’t. What we have to worry about here in the US is when capitalism edges out — replaces — democracy. Capitalism exploits; democracy enables.

    Too often when we boast that we want to bring democracy to other nations what we really mean is we want to supplant their system with capitalism, giving us another country that wants to buy our goods and services.

    • https://www.facebook.com/kyle.rose Kyle Rose

      I would argue that free markets are more compatible with liberty than democracy is. (Note I say “free markets” rather than “capitalism”, which is synonymous with crony capitalism today.) Free markets enable individuals to each make the choices that are best for them as individuals without requiring someone else’s permission. Democracy, to paraphrase Ben Franklin, is two wolves and a lamb voting on what to have for dinner.

  • PithHelmut

    For every unemployed person, every person on welfare and every special program for the individual or commercial interest, is an admission that Capitalism fails.

    • http://commentaramapolitics.blogspot.com/ tryanmax

      I think geraldfnord
      gave the perfect response above. Any system measured against perfection will fail.

    • John_in_Amherst

      Communism fails because it does not acknowledge the instinct to desire reward commensurate with effort. Even “lower” primates will rebel when they see compatriots unjustly rewarded. Capitalism fails because it only values goods or services that can be quantified and given economic value. Politics should seek to balance these drives. Our system is not doing it very well now.

  • HonestDebate1

    AG Holder boasts that his Mortgage Fraud Working Group has charged 530 people who ripped off 73,000 victims. He lied and was caught. It was actually 107 people who victimized 17,185. At first he said the associated homeowners’ loss was $1 billion and now he admits it is only $95 million.

    http://www.bloomberg.com/news/2013-08-11/eric-holder-owes-the-american-people-an-apology.html

  • MrNutso

    Well Maggie, hows “the not for the few” working out in the US these days?

  • Larry

    Ultimately, (money) has been shown to be a poor motivator for human activity. It fosters destructive exploitation of our planet and many of it’s inhabitants. A life spent accumulating wealth for wealth’s sake is akin to the life of a typical bacteria. How many on Wall Street are essentially parasites? We need to encourage more community based and mindful motivations. To the extent that those motivations can be applied to free enterprise activities, it can work. Unfortunately, bottom line profit margins remain the primary force, a psychopathology written into the laws governing corporate activity.

  • geraldfnord

    I think it important to make at least two distinctions between capitalism and the free market. Firstly capitalism is not built around a free market but rather around one in which the State backs certain forms of property and certain modes of contract that could not exist without the threat of State violence or it legitimisation of private violence—so, for example, the State allows you to use force to expel someone from land you’ve never seen or used, to use its force to enforce intellectual ‘property’ rights, and to enforce contracts an entire community, and perhaps any decent person, see as unfair. The State also allows for the accumulation of much more property than in the State of Nature, making such (as Franklin put it) a Creature [creation] of Society.

    Secondly, capitalism exists, and the Free Market never has—as such, the Free Market can only be evaluated by looking at markets less or more constrained, and we shouldn’t ever allow classical liberals (or communists, or anyone else) to say ‘This is a flaw that will disappear in the perfected version of my system, v and have that treated as an argument fitting for the company of adults. Systems that must be perfect to work will never work, and will instead punish humans for being human, and not the versions assumed—homo economicus, New Socialist Man, a person living in a just world or one in which everyone were an entrepreneur by nature…..

  • Jim

    look, capitalism does NOT work after “beating” communism. What do we have?

    1. massive inequality due to the shift of wages to upper management
    2. absolutely little social mobility
    3. high tuition cost
    4. high housing cost
    5. the government biased towards the rich… (QE2 and QE3?)

    if you want to see your world for the future, don’t look further. GO to Hong Kong. you will see your future or lack thereof.

    I hope there is another Che Guevara or Fidel Castro to keep this capitalist insanity in check.

  • Kurt Johnson

    Free market capitalism (as opposed to crony capitalism) makes everyone richer. Free market capitalism increases inequality only to the extent that it increases the wealth of some faster than others. It does not make anyone poorer.

    • 65noname

      huh? you’re joking, right?

      • nj_v2

        No joke. That’s the Libertarian fantasy speaking. As sincere and ernest as it is fantastic and impractical.

  • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

    While only listening on the radio (no computer) I heard some Ayn Rand quoted.

    I hope someone mentioned how shocked Alan Greenpsan was that in this world people powerful righteous moneyed people don’t behave like they do in Atlas Shrugged.

    (I missed some minutes in between.)

  • camk

    Isn’t capitalism really just a way to define a force of nature? After all, if you strip away the details, it is ultimately survival of the fittest? This would mean that barring any societal definition and, ultimately, regulation that the weak will be devoured by the winners. I would argue that the poor and unemployed of society are nothing more than the collateral damage of capitalism and we should be responsible for the ill-effects that result from it. Remember, capitalism is a societal choice, not a forgone conclusion.

    • Mari McAvenia

      “Inverted totalitarianism”, which is a term coined by Sheldon Wolin (read Democracy, Inc.), is not a societal choice. When has there ever been a referendum vote on unbridled, unregulated capitalism versus a more rational, better balanced economic choice?

  • Ion Simbotin

    The first two thirds of the hour — big disappointment; no teeth; hope Tom will take more calls.

    • 65noname

      you’re surprised?

  • John_in_Amherst

    Capitalism is a way to assign and manage economic value to goods and services in commerce. It is morally and spiritually blind. It ignores anything of intangible worth, anything that cannot be turned into a commodity for trade. If capitalism is not to ride rough shod over fundamental human values such as compassion, devotion, altruism, etc., it must be governed by rules that prevent economic interests gaining primacy over these human values. Human experience includes, indeed is made richer by, aspects of life that lie outside any “free market”. The short-sighted drive for economic return on investments is disruptive to societal and environmental interests in the long term unless the political process imposes rules to temper the avarice and lust for power that underlie capitalism.

  • David Rosenberg

    As a recent graduate with an accounting degree, I saw the extent to which corporations attempt to get away with dodgy accounting efforts. Auditors should be able to uncover corporate accounting malfeasance, but the profession is in the pocket of their corporate clients, and auditors are not chosen for their insight, intelligence, and carefulness, but rather for their friendliness, non-obtrusiveness, and willingness to bend over backward to serve the client.

    This is but a microcosm of the larger problem of what we have now, crony capitalism. Capitalism is not working because corporations are able to game the system both in terms of environmental degradation, accounting tricks to avoid taxes, etc. We do not have successful regulation of capitalism right now.

  • hellokitty0580

    I think that capitalism, as any other system or idea, is absolutely open to change if only we, in humanity make it happen because I do believe it’s been our best option so far. But capitalism has perpetuated so many horrible things: slavery, colonization, discrimination of women, certain ethnic groups, child labor, incredible debt, social immobility, and environmental degradation. These are not small matters. These are huge issues that if not dealt with and managed will destroy us. We have to work on capitalism and absolutely channel it’s energy. Everybody absolutely deserve access to the global economy, to their own economy. Most people are too far removed from their economy and their ability to affect their economic destiny. This is something we have to work on as a global community and change.

  • Jonathon Cronin

    How can we define capitalism as a amoral system when it can be directly linked to some of the most horrific ethical failures of humanity. Capital is a way to reduce the environment, people and their thoughts and beliefs to a commodity that can be bought or sold. To me it seems that capitalism is not amoral but rather one of the most critical failures of human morality and ethical behavior. Can we please not try to speak of capitalism without addressing the moral and ethical concerns that it creates.

    • http://commentaramapolitics.blogspot.com/ tryanmax

      Capital includes things like the environment, people, their thoughts and beliefs, as well as the commodities that are developed from the useful combining of those resources.

      Just because a thing can be used immorally does not make the thing itself immoral. I could use this internet forum to cuss you out, a minor immorality to be sure, but does that make the internet immoral?

      • Jonathon Cronin

        Reducing the use of bad language and the reduction of people and breathable air to something to be bought and traded are fundamentally different. Sure you can cuss me out and that doesn’t mean the internet is immoral. However, that does not infringe on my right to life, liberty and the pursuit of happiness. We are talking about 2 very different things.

        • http://commentaramapolitics.blogspot.com/ tryanmax

          *sigh* All things are different from one another. That is the shortcoming of metaphor.

          Capitalism doesn’t create capital. If life, liberty, and pursuit of happiness is the moral standard to judge capitalism by, then one must put it in the balance, not simply catalog the shortcomings. Measured against perfection, everything fails.

          • John Cedar

            Good point about metaphors.
            Capitalism is the right to own property coupled with freedom. What could be more righteous? Attacking the morality of capitalism is nothing less than attacking the morality of freedoms such as freedom of speech.

            I entered a pun in a pun contest along with nine other contestants and I did not win. But no pun intended..

      • Jonathon Cronin

        When you reduce a person or the world to a commodity you can only then act in the interest of profit. If the life or liberty of people needs to be sacrificed (clothing shops collapsing, Apple factories, China’s modern economy…) in the interest of profit then the system that makes that the decision should be put to question responsible for the ethical failings it creates.

    • Don_B1

      Capitalism as a way of letting individuals sell their output and buy that of others at an agreed on price of their own is amoral. But Adam Smith saw that there could be sales between individuals (or corporations) that could affect others not part of the transaction, which he called externalities, and which could be either positive or negative.

      Thus for capitalism to exist, the citizens must have a government that not only provides for the ownership of property but provides a level playing field between each of the parties to a transaction and those who may be negatively affected by that transaction. This is where ethics can enter the equation. The government may decide that no human being can be the property of another. The government may require those mining the earth pay those whose lives are affected by that mining process.

  • Billastronteacher

    I suggest that various Attorneys General take individuals (remember: a corporation, which includes banks – I hope – is an individual…) to court and charge them with fraud or stealing and see what happens. Then work on a “new policy” if the courts do nothing.

  • perihelion22
  • hellokitty0580

    Bethany Morton – To Serve God and Walmart

  • PeterBoyle

    Capitalism, under tight control can do the wonders that happened between the end of WWII and 1980. Freed of tight control capitalism gaver us the Great Depression and the Great Recession. Keynesian Economics harnessed Capitalism in the 1930′s and produced the greatest growth in the history of the US. Reagan and Thatcher ushered in ‘Supply Side’ (Austrian School) economics, removed regulations, decimated unions, and (lately) allowed Corporate money to flow directly into politics. Those actions not only distorted Capitalism, but also perverted Democracy.

    The ‘story’ we are told is of unlimited bright futures for those who adopt Captialism and Democracy, but those bright futures depend on everyone playing fair and by the same rules. Fair play and rules are not part of Capitalism, which always seeks to maximize profit in any way it can. Democracy can not exist when money controls not only who runs, but how they run. Democracy should never be a venue for making money, and that is what it has become. Capitalism should never control Democracy, but that is what we now have. The combined effect is Plutocracy.

    We have had a 30 year test of ‘Supply Side’ economics and have felt the effects. It’s like a sugar rush with a very bad let down (depression) after the feast. It’s like being drunk on exuberance and now the hang over is here. Capitalism depends on rational players making rational decisions for it’s stability. When it is under control of rational players it can do wonders; US infrastructure building after WWII, putting a man on the moon, rebuilding Europe and Japan after WWII, etc. All this was accomplished because Capitalism was under tight controls which protected the People and the environment from harm and insured that the profits of Capitalism were used to benefit the whole country – the General Welfare.

    The ‘Supply Side’ view of Capitalism became dominate during Reagan, and greed became not only good, but also patriotic. All controls that had kept Capitalism producing for the General Welfare were removed which proved steroidal to it’s growth. At the same time Reagan started the concept that government was the enemy of the People. In effect he made it patriotic to be greedy and unpatriotic to support the government.

    To ‘fix’ Capitalism we have to be able to control it, harness it for the Greater Good, and direct it toward a National Objective (as we did with the Space Program). Capitalism must be good for all the People, not just the top few. All boats must rise together. We must have a longer range view of objectives, not just this quarter’s bottom line. Sustainable Growth must replace Record Growth.

    The fix for Democracy is dependent on fixing Capitalism. Government should not be run by the top Capitalists, nor should it in any way be influenced by greed. Democracy needs to control Capitalism not the other way around.

    • RobertLongView

      Yeah, what we lack is the common good. Mission or Vision is gone. Every man for him-herself… .

  • Linda Fondulas

    Any Rand would argue that we have never seen the workings of true capitalism, that it has mostly existed within a semi welfare state , and that even the robber barons then and bow have had government assistance.

    • PeterBoyle

      …and if we ever were stupid enough to fully adopt what that failed Russain emigree advocated we would see a far worse crash than we have experienced so far. She, like Adam Smith, assumes rational markets and rational players. Neither is the true case. No one in their right mind would consider the markets under Supply Side to be rational, nor the top people rational. I think ‘Animal Farm’ is more relevant than ‘Atlas Shrugged’.

  • hellokitty0580

    I think what’s interesting in the US, and Europe as well, is that we tout capitalism to the world and tell the Global South that it’s the word and the way. However, as soon as any commodity or product gains traction and threatens the Global North we work against those countries and manipulate the market through the WTO and World Bank to make outcomes that are in the West’s favor. It’s really quite shameful and one of the many things that’s wrong with capitalism.

  • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

    “Fascism is such potent word” says our host.

    Hey, at least the term still means something.

    In the last five years “socialist” and “communist” have been overused in polite society to the extent that they don’t mean anything any longer.

    Historians will someday tell us what happened to that piece of language in less than 20 years after winning the Cold War.

    • Mari McAvenia

      Fascism is a potent adversary of democracy, to be sure. Corporatism (our current economic system) smacks of pure fascism any way you cut it or water down the language.

      • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

        I really meant “piece of language” to mean “socialism” and “communism”, but I’ll let that stand.

        I’ve read too many quotes from right-wing pols, staffers and media figures equating the three terms to start getting all history-wonk now.

  • skelly74

    What defines America? Consumerism. We need our food, clothes and shelter. We decide and have the options on the quality and variety of the necessities. We also consume entertainment and leisure to taste.

    Does the government supply these assets and experiences? To some, yes. Otherwise we work and pay for them to suit our taste. If we cannot pay for them, we have the option to borrow money to pay for them. Of course, we pay to borrow money also. This is an option. It takes discipline and awareness.

    Are we victims of capitalism or our own appetites? Stop consuming above your ability. Stop consuming at all. Stop working and creating options for yourself. Opt for the grey uniform, the govt. cheese, the concrete dormitory and gladiator sports.

    • Don_B1

      From your last paragraph it would appear that you are basically talking about individual’s spending above that for the basic necessities of shelter, food and clothing.

      I think you might get an appreciation of how good the poor are at managing their money. Naturally, like all humans, there will be “examples” of poor spending, but if you tried it you might be surprised at how hard it is to find the inexpensive items to meet those three requirements for living in this world.

      • skelly74

        I have to say that food and clothing can be inexpensive. Again, what are your tastes and desires? What type of food does one consume; how much food does one consume? Americans have many options. There ate plenty of options for inexpensive clothing. Does one only desire designer brands? Americans have options.

        I will agree that housing can be expensive. Housing is expensive because you not only purchase shelter, but a “bundle of rights”, ownership of real property. What an individual spends on shelter (owned / rented) will depend on location. This is certainly a matter of taste notwithstanding affordability.

        Just getting by can certainly be a struggle. This may be the lot for most Americans. We all want something secure, then we want something more. America has always offered that something more that we inevitably seek.

        Do we have the national personality and will to follow a economic system like the Nordic countries? Will we lose some of our options? Are lifestyle options the essence of liberty?

  • CK

    Everyone also needs to disentagle the following items: morality, ethics, capitalism, and constitutionalism. They are different and operate differently.
    I’ll use my Mother Nature example. When you ask people about mother nature, they talk about the wonderous redwood groves, cute baby animals, etc. They never talk about the coyote running down and killing the newly born baby animal. Capitalism is much the same. It’s an engine of progress and prosperity, but it requires that some win and some lose. The fundamental problem with our economy is that many, with the best of intentions, do not allow anyone to fail. It’s this “everyone gets a trophy” mentality that contributes most to income inequality.

    • HonestDebate1

      That’s an excellent point and analogy. I would add, unlike the baby animal, failure in the marketplace can be a stepping stone to success.

    • PeterBoyle

      What a Straw Man. First, we are talking about humans, and they have evolved past Hunter/Gatherer lifestyles found in ‘nature’. Going to anthromorphic examples is putting up a false dichotemy. Capitalism is a TOOL of humans, and should be treated as such. Capitalism, in and of itself, is not moral, ethical, or sane. It is the use of Capitalisn that requires morality and ethics, and our more evolved culture decides what is moral and ethical. There is no culture in history that has advocated the dominance of the many by the few, but that has happened over and over due to lack of morality and ethics by the leaders.

    • jimino

      Predators typically prey upon the weakened and vulnerable,so in your world the handicapped or those with unavoidable congenital problems are just going to have to accept being the easy prey. Or are there coyotes “with a heart” in your view of the world?

      • RobertLongView

        Coyotes bring u across the border where the legendary El Dorado Gold is located.

    • RobertLongView

      Indian Giver — White Man Taker, eh?

  • Adrian_from_RI

    Tom, you want to take ”A big second look at capitalism”? May I remind you that you never took a first look at capitalism. For you, as for most of us, it is still “Capitalism: The Unknown Ideal” (read that book). I am astonished by the ease with which the statists were able to corrupt our thinking and to turn the world of ideas upside down. The socialist have managed to take credit for all the benefits that capitalism has brought us – think Industrial Revolution – and to blame capitalism for all the horrors of socialism – think Fascism and Communism. Remember, crony capitalism is not capitalism, it is socialism.

    I agree with Ayn Rand’s definition, namely, that Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned. The result is that in a capitalism economic system people deal with each other as traders offering value for value to mutual benefit.
    http://aynrandlexicon.com/lexicon/capitalism.html

    • PeterBoyle

      In a Utopian world where all parameters are set by the author that would maybe be true. However, that is not reality. In reality those with power use that power to enrich themsleves to the detriment of those with no power. If all property were privately owned there would be no place for any without property (unless they rented property – which puts them under the control of those who own it). That calls up the early idea that only property owners could vote. Given that neither markets, nor those who are in them, are rational at all times, and that not everyone in those markets is equal, it is a system that is heavily weighted toward those who have and gain more power. Which is exactly what happened that led up to our last crash.

      • Bruce94

        Thank you for your excellent contributions to this discussion. Regarding the assumptions that the Adrians_from_RI and his ilk make about the way markets operate, I’m afraid those caught up in the alternate reality of Ayn Rand are constrained by an essentially ahistorical and anti-empirical worldview. According to their bogus theory, for instance, the Great Recession was caused by too much regulation in the sub-prime mortgage market and exotic derivatives market, which is of course delusional thinking that does indeed turn the real world “upside down.”

        However, some recovered Ayn Rand acolytes like Alan Greenspan (freed from the chains of the Goddess of Greed cult) have admitted they were wrong as, for example, when Greenspan testified before Congress that, in the lead up to the financial collapse, his belief in deregulation was fundamentally flawed because the “free” market does not always function as a perfectly self-correcting machine driven by the supremacy of rational self-interest and marginal utility. He went on to place the blame for the financial crisis where most of it belongs–on Wall Street for bundling the sub-prime mortgages into toxic securities.

        BTW an interesting read I’d recommend on the subject of decision-making and rationality in our markets was penned by Dan Ariely, noted behavioral economist. It’s called “Predictably Irrational.”

        Again, thanks for the sanity you’ve brought to this conversation.

        • RobertLongView

          Euro-Prusso-Hollywoodland neo- faux fantasia supercalifragislistic altered state of consciousness Ayn Rand mind.

          • Bruce94

            Perfectly stated.

        • Don_B1

          I was not aware that Federal Reserve (ex)Chairman Alan Greenspan was a “recovered libertarian.”

          He did admit before Congress a miscalculation on the inability of the “Free Market” to self-regulate (well enough to prevent excessive losses) but I did not take that to mean as much as I interpret you as doing.

          • RobertLongView

            He was humbled and saw the light! And what all this greed hath wrought upon man.

          • Bruce94

            Perhaps I exaggerated Greenspan’s gyration before Congress. According to the NY Times, he did acknowledge to the committee that his belief in deregulation had been shaken. And during his testimony when Republican members tried to blame the housing bubble on Fannie May and Freddie Mac, he apparently disagreed assigning more blame to Wall Street. Aa a long-time friend and associate of Ayn Rand and a contributor to the Objectivist, Greenspan delivered a mea culpa before Congress which struck me as a fairly significant departure from many of the tenets of his Randian faith in laissez-faire, “free” market capitalism.

    • Sy2502

      In reality we have never had real, true, free capitalism. Many of the problems attributed to capitalism are actually due to government meddling with free market.

    • RobertLongView

      U mean, Hon. Uncle Mitch from Kaintuck and his job-killing tax mantra?

  • Prairie_W

    Probably what each of us should do is make two list. One lists everything that makes us feel genuinely free. The other lists those parts our lives that make us feel used or tied down.

  • John_Hamilton

    One of the guests proclaimed that Capitalism has been the greatest engine of economic growth in history. This is the standard defense of Capitalism. Later he said that technological improvement is the growth that is needed.
    What wasn’t mentioned is that in our infinite growth system on a finite planet we will inevitably reach a point where further growth of output will cost more that it benefits humankind. Some would argue that we have already reached that point.
    The most typical way that cost can exceed benefit is in damage to the ecosystem, and we certainly are seeing that in plain view. Another way is in the physical, psychological and social costs of new products.
    The connection of cell phone use and brain cancer has been established, but so far few are listening. Distracted driving deaths due to use of personal electronics is increasing annually, as is cyber-bullying, “sexting,” and posting videos of rapes.
    This won’t change on its own. We have a near-total level of corruption of our political system. A professor of mine decades ago designed a gerrymandering optimization computer program that he was planning on selling. I asked him why he was doing this, and he said that the system was going to collapse anyway, and he was just speeding it up. He figured he would make some money in the process.
    I don’t know if he ever sold his program, but ALEC and its sponsored legislators around the country have certainly been successful in corrupting state legislatures and the U.S. House of Representatives. What corruption remained has been accomplished through bribes, euphemistically known as campaign donations. Because the same “interests” that control the political process also control the mass information media, the public is easily manipulated and controlled.
    The professor was right. The system will collapse. Corruption is preventing sensible responses to climate change, population expansion, glut of frivolous products, and soical disintegration. There is nothing on the horizon that shows any hope of reducing or eliminating this corruption. Like with an approaching hurricane, we should prepare to ride the storm of economic collapse out. Then, who knows? This will be an enormous test for humankind. Are we, as a species, capable of learning from experience?

  • Gary Talbott

    Any system that tries to create full economic equality will ultimately fail because it fights reality: Humans are not equal – effort must be rewarded. So the conversation should be about what amount of inequality are we willing to accept?

    • TomK_in_Boston

      You’re correct, tho nobody is suggesting full economic equality. We were capitalists when a CEO was making 50x a worker’s wages and we’re capitalists now when it’s 500x. Winners and losers, peasants and aristocrats, in both scenarios. I don’t know exactly what is the “right” inequality, but I know what we have now is too high, and priority 1 is to dial it back. Easy first step is more progressive taxation.

      • Sy2502

        But that’s the point. When people like you say “I don’t know what’s the right number but the one we have now is not it”, you are making a completely arbitrary statement. 500x is not right but 50x is? Why? According to what principle? If 500x is not right, would 499x be right then? When I hear this kind of talk, once I take the conversation in depth it always turns into something like “penalize everybody else, but live me alone”. Yeah, well, guess what, everybody else wants the same.

  • TomK_in_Boston

    It’s stupid to tak about “capitalism” as if it was a single system. There are different versions and they are very different indeed. The capitalism of the 50s and 60s with strong gvt regulation and progressive taxation worked brilliantly. The dog-eat-dog low tax, low regulation capitalism of the late 19′th century, early 20′th century, and the present, is a freaking disaster for anyone but the elites. It mainly serves to redistribute the wealth that the middle class accumulated during better ties to the top.

    We don’t need a new system, we don’t need new ideas, we don’t need to abandon capitalism, we just need to return to the version that once worked so brilliantly for the middle class.

    • pete18

      It wasn’t the high tax rate that made things work in the 50s and 60s.

      • Don_B1

        If the growth had been any greater in that period, there would have been a lot more volatility in that growth, with boom-and-bust recessions hurting overall benefits of the average citizen, so it will be hard for you to show that the high tax rates hurt the economy.

      • TomK_in_Boston

        How do you know that? Did you hear it on faux news or the righty blogosphere? Do you really think that progressive taxation won’t reduce inequality?

        Progressive taxation alone wasn’t responsible for our once-great version of capitalism. Strong gvt regulation, in particular of the financial sector, was important as well, along with strong Unions.

        ps aren’t you supposed to say we were prosperous because our competitors had suffered in WW2? get with the program!

        • pete18

          I got it from a study of history and a look at the tax tables. You must be awfully insecure about your opinions that you must always preface them with some sort of lame comment on Fox news or conservatives in general.

          Given that you are already “with the program” with your Pavlovic and predictable pining for higher tax rates and the glory of the 1950s, why would you be critiquing anyone else for making a consistent and predictable observation based on their world view, which many people with the same world view share?

          In the 1950s, we had the world market to ourselves. That made a huge difference. The higher tax rate did not give us a bigger percentage of tax revenue compared to our GDP. The total tax revenues in the 50s were lower than the ones in the 80s after Reagan’s tax cuts.
          So the high tax rates could not have made the government or the country any more prosperous than in the era of lower tax rates.

          http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205

          Over time the 90 % tax rate of the 50s was a detriment to job creation and the economy, as pointed out by liberal icon JFK, who cut the tax rates. An idea that you yourself previously admitted might have been justifiable based on the extreme tax rates on the upper brackets that you are now extolling.

          • TomK_in_Boston

            Thanks for following my advice and finally parroting the official Party Line about having the world market to ourselves. It’s good to see that you guys haven’t started thinking for yourselves.

          • pete18

            As usual, you don’t respond to content, but try to deflect with the strange technique of attacking other people for doing what you do in spades. You are a phenomenon in the realm of lack of self awareness.

          • TomK_in_Boston

            “As usual” you do nothing but repeat talking points in response to my original content, or, as in your original post, the zero-content “DID NOT!”. I even told you what you would do next “ps aren’t you supposed to say we were prosperous because our competitors had suffered in WW2? get with the program!” and you performed right on cue.

            It’s obvious that high taxes, strong regulation and strong unions were the bulwark of the middle class, and all you can do is crank out that tired old line about world markets. Pathetic.

            ps did you ever stop and think that as good capitalists we SELL to world markets, so having them suffering from WW@ isn’t all good? Probably not, since that’s not in the voodoo econ playbook.

          • pete18

            I’m very curious is to how you think your original post, which lauds, unions, high taxes and regulations is some sort of new idea that is anything other other than a left wing talking point?

            Either the two predictable and endless repeated ideas about taxation from the left and right, heard on BOTH ends of the echo chamber, are reflective of two different and honestly held ideas about taxation and economics, which can be debated or they’re BOTH talking points. Which is it because you’re not offering anything original, in depth or not heard on every left-wing blog and talking heads show in the country?

            Back to the debate: I’m still waiting to hear your case as to why higher taxes contributed to the economic nirvana you imagine the 50s to be. They didn’t bring in any more revenue for the government to spend on people than the low-tax administrations did (in fact they brought in less during Eisenhower) and according to JFK they helped drain investments and job creation. So what role did they play other than the “obvious” fact or theory free good that you claim for them?

    • GuestAug27

      TomK, it is a single system – one in which a few benefit at the expense of many. The only thing different during the 40 years after WWII was that the capitalists saw and feared a real alternative to capitalism. In other words, capitalism had a competition that made it perform a little better.

      • TomK_in_Boston

        Disagree – high tax, high regulation capitalism is nothing like we have now.

  • TomK_in_Boston

    We’ve gone from a system where the median income rose with GDP to one where all new wealth goes to the top. That’s the problem in the USA and reciting a list of righty elitist talking points does not help solve it.

  • northeaster17

    The biggest problem I have with capitalism is that it turns the planet that we live on into a commodity. A commodity that exists to drive dollars to those that exploit our universal home without having to acknowledge that this is the only home we have. It is worth much more to all of us than all the dollars ever earned.

    • Bluejay2fly

      The constant drive for expansion in a world of finite resources is madness. All Americans seem to do now for entertainment is eat and shop. Ironically, instead of making us happy it has made us fat and slaves to our own property. Carlin said this cycle makes about as much sense “as a starving man taping sandwiches all over his body’. We need to fill that hole in our souls by feeding our minds, being content with what we have, becoming better stewards of the environment, and enjoying the benefits of creating and living in a kind and just society. Sadly, you’ll never see people put down their Big Macs and go for a walk or sit by a tree and read a book because it doesn’t stimulate the economy. That is the trap of consumeristic capitalism which is destroying the American Soul.

  • Don_B1

    Note that the Economist is a center-conservative magazine, not given to promoting policies of even the center-left.

  • JoshuaHendrickson

    As a socialist, I’m not a fan of capitalism, but I think it’s fine as far as the distribution of luxuries go. Subsistence food, housing, clothing, and subsistence income ought not to be capitalized–in other words, we ought to be entitled to have such things as a right just for being alive. Beyond that, let us work for and pay for designer clothes, upscale homes, fine dining, etc. To me, that’s the moral position. Survival should not cost an individual one red cent; everything beyond that should have a price.

  • kenrubenstein

    Many words were spoken, but little light (IMHO) was shed. Given the crash of 2007 and the illegal (but unpunishable) shenanigans that enabled it (which have not yet been addressed), I think we’re still in deep nyeh, nyeh.

  • nj_v2

    Hmmm…A program about looking at capitalism and no Richard Wolff—one of the most potent, current critics of the system—in the lineup every where.

    On Point tracks middle-right once again.

    And yet another program on economics withe no serious attention to steady-state models.

  • Brian Deck

    Since “Money Talks”, let’s talk with our money. Every purchase is a vote. Making collective good begins with a single choice. When YOU make a smart purchase YOU make a smart vote. Crowd founding has the power to transform. If you have the idea, run with it, we will support you. That’s the power of the free market. Imagine the funding Americans lovingly give as donations funneled into prototypes and innovation. We need investment not spending. I have creative capital and I value design. What do you value?

  • Sy2502

    Europe has tried Keynesian economy since the recent depression, and they are still well and truly deep in economic woes. Seems like it doesn’t work so well after all.

    • Don_B1

      False, FALSE, repeat FALSE !

      The European recovery has been slowed by the fact that the countries (Spain, Portugal, Italy, Ireland, etc.) are all on the same currency so cannot devalue their own currencies to rebalance after private sector excesses in a housing bubble, where German and French banks lent to banks (and sometimes developers) in the lower tier countries to overbuild. Then when the financial crisis hit in 2008, sales of that housing plummeted, leaving workers with elevated wages because of the previous demand unemployed. Spain had had surpluses before, now had to assume the losses of its banks, putting it into large deficits. Then the German banks, which had made large profits on the loans, raised interest rates on future loans.

      The failure of the ECB to be a “lender of last resort” pushed the interest rates even higher.

      Nothing against Keynesianism here. Purely due to austerity policies enforced by Germany, etc., which do not work, which is NOT what Keynes called for, the European economy has not recovered and is toying with staying in recession.

      Nice try, but you totally do not have your facts right.

  • Dave Trumbore

    How much wealth is “enough”? Does anyone really need billions of dollars in income every year? Does capitalism stress personal responsibility or is the sky the limit?

  • GuestAug27

    “Then the Cold War ended and capitalism got the field pretty much to itself” is a key statement. It is not a coincidence that the belt-tightening for the workers in the so-called developed capitalist countries (the U.S. and Western Europe) begun in the 1990s, after the fall of “communism” in Eastern Europe and China.

    Even capitalism needs competition to perform at its best. That’s why we need to quickly find a realistic alternative to capitalism that can hang above the capitalists’ heads as a big stick. Without this, the trend of the past thirty years will continue and the U.S. becomes another Brazil or Mexico or India with a tiny minority of super-wealthy and the rest of us fighting each other over the few crumbs that trickled down to us from the rich.

  • Keith Laufenberg

    Capitalism, by it’s very nature, is defined as a system whereby the strong take advantage of their position of strength, capitalize on it, and take as much advantage of the weak as they can. In a nation, whereby the majority of the population claim Christianity, I see this as a total contradiction, especially considering that corporations and politicians run this country and both give their allegiance to one thing and one thing only: money. They pass laws for themselves and their cronies and then totally deny the general public. They give in to lobbyists, and deny the public such basic things as health care, food and clothing and the right to exist as fellow human beings. They hang out among only the wealthy and “connected” all the while disdaining the voting public and then, when the elections come around, their lips drip with the lies they have so thoroughly practiced their entire “careers.” They are totally removed from reality and cannot see beyond their bank accounts. Capitalism has done its job on these people and they will continue to worship at its altar and sing its praises as long as they benefit from it. Capitalism rewards greed and selfishness; it rewards all the wrong qualities and punishes all the right qualities. If you are a good human being, are fair and even, do not lie, look after yourself and your fellow man whenever you can, give your time to charities and work to support yourself and your family, you will have inner peace but little worldly goods. On the other hand, if you are selfish, greedy, aggressive, lie just enough whenever you can gain an advantage from it, hoard your money and lie, cheat and steal if it is to your gain, you will fare much better in this world, in that you will have many more possessions and money, even though you will never be truly respected, your money, as far as you’re concerned, makes up for everything and shines whenever you appear because you make sure to “impress” everyone with your possessions and power. America is not a democracy: if it were and it was up to the public to decide, you would have universal health care, no tuition in any educational institutions and respect for the truth, everything we don’t have in this country, at this time. I am 67 years old and I know that many people say they “yearn for the good old days,” usually meaning a return to the 50′s and 60′s. I lived through those years, obviously, and can tell you to forget about: there were, and are, no “good old days.” Franklin Delano Roosevelt saved this country form Communism by changing from a politician into a human being and passing such things as social security, unemployment insurance and many other programs that may have saved us from another revolution, which is what it will take to topple Wall Street, the far-right Republican Party and a system of Capitalism that changes absolutely everything in life into dollars, with the question: “What’s it worth?” The answer is, of course, always a sum of money.

  • GuestAug27

    Did you mean to say “has communism in China co-opted certain aspects of free market for its own gain”?

  • GuestAug27

    Yes, capitalism is bad, very bad. But do you have an alternative? If not, any criticism of capitalism is entertaining, but pointless. Would you prefer something like PARECON promoted by Michael Albert? How about the Venezuela experiment?

    • Don_B1

      Unregulated capitalism is what leads to bad results.

      To force a choice between the extremes of no regulation and overregulation is a strawman argument.

      That does not mean that getting regulation at the correct level is easy, and like most things created by humans, will undoubtedly be imperfect, but it is what is needed to provide a nurturing economic environment for all the citizens of the country, not just the wealthy.

  • Don_B1

    When someone makes an investment to build a business or buy a franchise, and that business does not sell its goods or services, the investor has lost as a result of entering the capitalist market. And the government did not force the person to do that!

    When a business fails, the employees, at least some of whom may not have done anything to cause that failure, lose their jobs and income, and when other “market forces” have created conditions where other employers are not hiring any new workers, those employees have suffered because of unfettered capitalism.

  • Don_B1

    It is one of the oft-repeated myths that the U.S. was able to grow its economy following WWII by exporting its production as sales to war-ravaged Europe and the Far East.

    When you look at the numbers, exports can help but have NEVER been more than 10% of U.S. GDP.

    The major growth following WWII was due to the pent-up demand from the rationing used to ensure the economy provided the necessary arms to fight the war.

    Then as Europe and Japan rebuilt, they had the newer, more efficient factories with which to compete with American products.

  • andrewgarrett

    Again, the alternatives to capitalism were so much worse: Marxism killed more people than capitalism, imperialism, and every religious war in history. Feudalism wasn’t very peaceful either, and almost everyone was really poor. Subsistence farming keeps people in poverty, which is why subsistence farmers around the planet still flock to factories and cities. A billion people in the last two decades have escaped extreme poverty, thanks to global capitalism.

    • TomK_in_Boston

      False choice. The alternative is not Marxism, it’s a better version of capitalism.

  • Andrew K

    Why are you
    getting on an academic for being too colorful? It was for a television audience
    not a college lecture. I don’t agree with his perspective, but I do like the
    way he made the topic approachable with his questions. He could have made it as
    complicated as he wanted, but that wasn’t the format and I appreciate it when academics,
    “step down from the ivory tower”.

  • Don_B1

    It is fully “free market” capitalism that does NOT raise all boats, precisely because the wealthy can use their wealth to gain greater advantage over those in lower income.

    The average worker’s wages actually were even or only slightly increasing for the last 10 or more years. Thus nearly half of workers did not see their “boats rise,” while the rich saw their income go up by 20% or more, particularly in the 2009-2011 period of slow recovery from the Great Recession.

  • Don_B1

    The American economy performed the best in its history in the 1950s and ’60s, with the second best in the 1990s.

    The reason that the Republicans can make their false arguments effective is the massive salesmanship effort they began following their landslide loss in the presidential election of 1964. They made a huge study of effective marketing, exemplified by the current work of consultants like Frank Luntz, which has sold a lot of Americans a bill of goods.

  • R Perry

    No one seriously interested in capitalism and its past, present and future affects on America’s social and economic growth can afford to not study the Theory of Volitional Science. Without Volitional Science you will continue to discuss the topic in endless circles of confusion.

  • TomK_in_Boston

    The difference between the oligarchic present and the glory days of the middle class is described by these 3 charts:

    We’ve given the rich a free ride on taxes

    http://upload.wikimedia.org/wikipedia/commons/e/e8/US_high-income_effective_tax_rates.png

    We’ve given the corporations a free ride on taxes

    http://betweenthebalancesheets.files.wordpress.com/2011/10/effective-corporate-tax-rate.png?w=630&h=458

    We’ve busted Unions

    http://democrats.edworkforce.house.gov/sites/democrats.edworkforce.house.gov/files/resize/images/charts/unionincome-graph-600×429.jpg

    None of these have anything to do with capitalism vs something else! We were capitalists on the left of the charts (then), we’re capitalists on the right of the charts (now). Our problems are caused by choices within the capitalist system. We could raise taxes on the rich and the corporations and start supporting Unions with strokes of a pen, and we’d still be capitalists.

    • pete18

      Again I ask: Higher tax rates didn’t bring in anymore revenue for the government to spend on
      people than the low-tax administrations did (in fact they brought in less during Eisenhower) and according to JFK they helped drain investments and job creation. So what role did they play in creating the “glory days” of capitalism?

      • TomK_in_Boston

        First, I didn’t say anything about more revenue, I discussed where it came from. Can’t you see that a system with the SAME amount of tax revenue is quite different with most coming from the rich and the corporations, vs with most coming from the middle class? The top rate is strongly correlated with inequality:

        http://graphics8.nytimes.com/images/2013/05/28/opinion/052813krugman1/052813krugman1-blog480.jpg

        Second, it’s standard righty Party Line to say that higher rates don’t bring in more revenue. However, it’s not true.

        http://i.huffpost.com/gadgets/slideshows/29136/slide_29136_290494_large.jpg

        On the whole, higher rates = higher revenue. The right likes to hide this using the fact that GDP is so large that a fraction of 1% is a lot of $, so you make a graph where the samll changes are invisible. Goog for fooling the mathematically challenged.

        Congrats on bringing up JFKs tax cuts, I know that’s a favorite TP, as I’ve seen it hundreds of times. Thing is, it’s an irrelevant bit of misdirection. JFK cut taxes when they were very high. We now have, historically, very low rates. The actions needed for these two radically different environments are completely different.

        • HonestDebate1

          When have the top 1% ever contributed more to the overall revenue than now?

        • pete18

          But the rich pay much more now of the total tax burden than they ever did in the 50s, so how does your argument make any sense? Where is the fuel to the golden age that you are talking about? Tax rates are not the same as effective rates or actual taxes collected. Higher rates encourage people to shelter more money and take it out of the economy rather than spending it or risking it on investments. This is the whole basis of supply side economics, which you don’t seem to understand.

          If something being repeated 100s of time makes it a talking point crime, rather than a salient fact, then you would serving multiple life sentences at a maximum security prison right now (maybe you’ll also address my
          pointing talk question to you in my post below.) I mention JFK in this
          conversation, as do other conservatives when discussing supply side economics
          with liberals, so you can’t avoid the content of the argument by diverting
          to a Reagan, Fox news, conservatives are evil monologue.

          You were the one promoting the tax rates of the 50s on upper income earners as being a panacea, JFK disagreed with you. He also thought that
          the higher rates initiated during World War 2 were purposely conceived to
          restrain growth but were too large a drag on growth during peace time, pulled money out of the private economy and reduced investment and risk. These are general economic arguments about tax policy, private money and growth. They didn’t become obsolete when the tax rate dropped to 70%.

          The final and best means of strengthening demand among
          consumers and business is to reduce the burden on private income and the
          deterrents to private initiative which are imposed by our present tax system —
          and this administration pledged itself last summer to an across-the-board,
          top-to-bottom cut in personal and corporate income taxes to be enacted and become effective in 1963.

          I’m not talking about a “quickie” or a temporary tax cut, which would be more appropriate if a recession were imminent. Nor am I talking about giving the economy a mere shot in the arm, to ease some temporary complaint. I am talking about the accumulated evidence of the last five years that our present tax system, developed as it was, in good part, during World War II to restrain growth, exerts too heavy a drag on growth in peace time; that it siphons out of the private economy too large a share of personal and business purchasing power; that it reduces the financial incentives [sic] for personal effort, investment, and risk-taking. In short, to increase demand and lift the economy, the federal government’s most useful role is not to rush into a program of excessive increases in public expenditures, but to expand the incentives and opportunities for private
          expenditures.

          And believe it or not he said all this before the invention of Fox News!

          http://www.americanrhetoric.com/speeches/jfkeconomicclubaddress.html

          • J P Fitzsimmons

            If one group has all the income wouldn’t that group have to pay all the taxes?

          • pete18

            When talking about income the correct word is “earned” not “has.” The upper brackets pay a much larger percentage of the taxes collected than the percentage of income earned. In 2009, the top 10% earned about 43% of all income but paid 70% of all taxes . The bottom 50 percent earned about 13% of all income but paid 2% of all taxes.

            http://www.heritage.org/federalbudget/top10-percent-income-earners

          • J P Fitzsimmons

            Taxing the wealthy at a higher rate is in perfect harmony with free market neoclassical economics, the goal of which is to maximize utility. An extra dollar has very low utility to the rich man compared with the poor man. You’re correct though. A large and ever increasing chunk of the income of the wealthy is classified as unearned.

          • pete18

            The rich man is already forking over much more of those low utility “extra” dollars to the government than the poor man is so all is right in your version of neoclassical tax policy. “Unearned” is a euphemism for “already taxed once” and “investment dollars that are good for the economy.”

  • The_Truth_Seeker

    With regards to start-ups getting capital:

    The recently passed AIA (so called, “America Invents Act”, March 16) will make things MUCH worse for small inventors and start-ups, yet the news media didn’t cover this probably unconstitutional legislation at all! This was quickly put through by the Congress and signed by Obama, at the request of the large multinationals who heavily lobbied for it. It will greatly increase the cost to obtain and protect patents and will change our 220 year old system from a “first to invent” system, into the European and Japanese “first to file” system, where an inventor only has a maximum of 1-year to file for patent protection, or risk loss of their invention. Big companies can easily do this, small entities won’t be able to do this, in most cases. Most inventions can’t be perfected in less than 12 months, unless you have lots of money and people working on it. The effects of the AIA on innovation in America will become clear in less than 5 years. Investors won’t want to risk investing in the work of small inventors, or most start-ups … it just won’t be worth it.

  • The_Truth_Seeker

    See Elysium!!!! It’s totally related to this discussion.

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