this post was submitted on 04 Nov 2024
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Yup. "Capitalism" has become a punching bag for people who are frustrated about some form of government protectionism or lack of interventionism. If you ask someone to define it, you'll get wildly different answers based on whatever they're frustrated by. The real problem is cronyism, where the "haves" get special treatment from those in power so both sides benefit.
Example w/ Musk and Trump
As an example, look at Elon Musk buddying up to Trump. There are two explanations (probably more) here:This all happens under "capitalism" because Musk is motivated to get more capital, but it's happening through government, which ends up essentially as a government subsidy of Tesla (and other domestic EVs) using taxpayer dollars (in this case tariffs). It's not a direct handover of cash, but when your foreign competition needs to charge twice as much as they normally would, there's less motivation for your company to drop prices.
Capitalism is intended to be a system where the market is largely separate from the government, but everything is co-mingled and people point to the knotted mess as "capitalism," when really it's a mess of different political ideologies all messing with market forces. What we actually need is for more capitalism, as in less government interference w/ the market, so market forces can actually fix things.
Potential solutions to better use market forces
This means:There's certainly more we could do, but the above should significantly help correct the major problems we see today. Right now, it takes a massive scandal for a wealthy person or very large business to fail, and the above would dramatically reduce the scandal needed to cause one to fail.
"More capitalism" doesn't mean screwing over the poor either. In fact, if you look at the Nordic countries, they're actually more capitalist than the US ins many ways, and they have solid social programs. The difference is that there are clearer boundaries between government and the market, so you don't end up with as much weird "collaboration" between companies and the government.
I personally believe in UBI/NIT (Universal Basic Income/Negative Income Tax) instead of most welfare programs (perhaps keep Medicare/Medicaid, but replace Social Security, food/housing assistance, etc) to minimize the disruption of natural market forces. That would be a very capitalist-friendly solution where the government and the market stay in their own lanes.
Your reforms sound good, but aren't pragmatic. Today's system requires you to have lobbyists to push an agenda through. Who is going to fund the lobbyists to make these reforms happen.
Also, even in an ideal capitalism, there is still an injustice at the heart of the system. The employer-employee contract violates the tenet of legal and de facto responsibility matching. The workers are jointly de facto responsible for production, but employer is held solely legally responsible.
@technology
My issue with this line of reasoning is that it largely ignores risk. The risk an employee takes is the risk of missing future wages if the venture fails, but they have no risk of losing past wages. The risk an employer takes is loss of invested capital and thus loss of past wages and the ability to continue the venture.
The problem, IMO, is that we've overly protected the employer so their risk is mitigated, but we have done little to protect the employee. Likewise, wages can become uncompetitive because our legal system tends to benefit larger companies over smaller companies, so it becomes incredibly difficult to unseat a dominant company, even if your product is better (large company can waste smaller companies' capital with frivolous lawsuits and unnecessary red tape).
That said, if employees want to take on the risk an employer takes on, they can either become an employer themselves (i.e. start a business) or form a co-op with other workers. However, many are uncomfortable with taking on that risk, so they apply for jobs instead of creating their own.
If we go with a socialist system, we'll still have employers and employees, but we'll just socialize the risk and dilute the profit motive, which I think will stifle productivity. Why work hard if the potential upside to you for outperformance is small? Let's say you're in a co-op with 9 other people with equal split of profits and you're twice as productive, you'll only see 1/10 of that come back to you. Why do that when you could be the employer and see a much larger share of the profits?
The issue here isn't with capitalism as an idea, but that we've allowed such a disparity between productive work and profits, and I think the reason for that is government protectionism, not capitalism.
Exactly, the problem isn't capitalism, but government. If we swap capitalism for socialism but leave the government structure in place, we'll have the same problem. If you think shareholders are bad, you won't want to see what happens when politicians run businesses...
1/5
Worker coops can have managers. Managers' interests can be aligned with the long term interests of the firm by giving them non-voting preferred shares as part of their compensation. Managers will make sure workers they are managing perform. The difference is that these managers are ultimately accountable to the entire body of workers and are thus their delegates.
Profits/wages don't have to be divided equally among workers.
I'm going to use multiple toots since I'm on Mastodon
It really depends on the specific form of socialism. If we look at the most influential forms (say, USSR or China), the decision makers are politicians, so they're more motivated by power and influence than the good of the whole.
IMO, socialism can work if it's practiced by smaller orgs and not as a government structure. So unions and co-ops, not planned economies.
I'm not a socialist because I think markets are useful and haven't seen a planned economy proposal that seemed plausible. Worker co-ops and unions aren't socialism in 20th century sense because they are technically compatible with markets and private property.
An economic democracy is a market economy where all firms are worker co-ops, so I was speaking about managers in a worker co-op
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