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View Diary: The end of capitalism as we know it. (25 comments)

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  •  OK, (0+ / 0-)

    the remaining poverty in our world is an additional issue in this discussion.

    I would like to play the devil's advocate here. As I understand it, the first part of your excellently presented analysis above pointed out that our economies first grew rapidly as a consequence of our "growing the markets" (more employment and more core consumption or some such stuff). Now, it is stipulated that our economies can't grow as fast because there is no really effective/meaningful way to invest capital, and that we as an effect of that have a growing amount of dead capital around that we desperately try to throw at the next illusional bubble.

    So the devil in me asks: Don't the 1 billion people who are effectively cut off from our economies today represent exactly such an opportunity for growing our markets in a meaningful way?

    Whether we can (and are willing to) adjust our capitalistic systems to do that effectively is a good question. If we can't, I would agree that it may be time to question our entire economic superstructure.

    But, this is another question/issue than the one analysed in your original post. The conclusion in your original post that I don't buy is that we from

    1. We have less measurable growth now than we had 30 years ago, and more dead capital around.

    can conclude that

    1. Capitalism is destined to collapse (or won't be able to meet our housing, clothing and food demands).

    You can try to sell me 2, but I won't buy it solely on the basis of 1.

    •  If capitalism were capable of selling (1+ / 0-)
      Recommended by:
      Mbuto

      consumer goods to the dollar a day crowd, it would be doing so. Unfortunately, there is a fee for entering the consumers club, and a goodly proportion of the world population can't meet it. They are never going to , either, in capitalist terms, so, the target population is essentially closed to those who are already in the club.

      Item 2 is based on a very simple fact about capitalism: Capital must find a ROI or die. Any capital that cannot do so ceases to be capital. It can not be invested. From this basic fact follows another: There is no limit to the growth of capital. However, there is a limit to growth of every natural system, so capital will reach its own limits and will follow the path that Jared Diamond describes in Collapse

      The economic facts summarized in item 1 are measurable consequences of the limits to the growth of capital, and its efforts to find an alternative niche to supplement investment in production.

      Not being a capitalist, I have nothing to sell you. However, I am willing to freely share the results of my research and thinking with you.

      •  Of course capitalism (0+ / 0-)

        can sell consumer goods to the dollar a day crowd. They are people no different than you or me, with the same inherent ability to work and earn a salary.

        The entrance fee that you mention has already been paid over and over for more and more people throughout history, with "capitalism" ready to step in and include people in its system. The "fee" as I see it is (some) education, a stable infrastructure, and trade options. We don't have to abandon capitalism to help poor countries pay this fee for their populations. (That is, we don't have to do it "in capitalist terms". We still do have governments and taxes, as well as private charity.)

        Item 2 is based on a very simple fact about capitalism: Capital must find a ROI or die. Any capital that cannot do so ceases to be capital. It can not be invested.

        Many people who invested in the dotcom boom had a horrible ROI. They invested nevertheless, and thanks to that, we can communicate here today.

        From this basic fact follows another: There is no limit to the growth of capital.

        Inflation can eat up capital faster than we can blink. Btw, that's part of the reason why investors decide to bet on the ROI market instead of saving their money under their pillow.

        However, there is a limit to growth of every natural system, so capital will reach its own limits and will follow the path that Jared Diamond describes in Collapse.

        I checked the link and will try to follow your argument faithfully (even when I don't accept the "dying capital" part). As I understand you, a central premise of your argument is that if/when capitalistic systems can't "grow in a meaningful way" (like in the Cola example above), they will reach a severe crisis.

        I can agree that "growth" will, at least, be likely to slow down significantly when we reach a limit of exploitable resources and manpower. But, says the devil's advocate, will the capitalist system not still continue to reward more effective ways to exploit/recycle resources and manufacture goods and services? The "squeeze" that is mentioned in your original post, can that not be interpreted as a sympton of increasing overall effectivity, where new and better ideas will be the target of the surplus capital? Or, to put it in another way: Let's say Coca-Cola Inc. can't convince us to drink more coke and will begin to lay off workers while retaining production capacity. Does that mean that Coca-Cola Inc. and capitalism will cease to exist then? Or might it not simply result in the laid off workers being employed in new fields of business where ROI-seeking capital will be invested in their labor?

        I can agree that growth will naturally slow down when we run out of new ideas (not that we will) and readily available resources. But so far, I don't follow the logic in this meaning that capitalism will collapse. Busting bubbles does not equal collapse or impossibility to meet our moral ends. I also don't understand why recycling instead of mining would mean the death of capitalism. For what it's worth, I'm all for forcing more recycling on the markets by governments seizing control of and harshly limiting access to fundamental non-renewable resources.

        Being a capitalist, I understand my time is valuable. While I am unsure about the ROI, I am confident it is better invested here than left unspent. Time, after all, is one thing we can probably agree can't be recycled :-) My fundamental proposition is that as long as people have time to invest, capitalism will be perfectly viable and can and will serve as a great instrument in our enterprise of seeking our moral and more mondane ends met.

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