Capitalism And Free Market Economics

[steve_bank]

In an econ class the teacher asked what is the purpose of capitalism.

I said something like provide the greatest amount of goods and services at the lowest cost.

He pointed his finger at me and said ‘Wrong! The purpose of capitalism is to make a profit.’ It took time working in technology to fully understand. Creating jobs and raising standards of living are consequences not goals of capitalism. Invest now for a greater return on investment in the future, aka profit.

If you have a pension or personal retirement plan it is based on investment and future corporate profit.

Large scale primary and college education is based on the economy creating enough excess wealth to pay for it. I think that would be the same in an economy not based on profit without currency.

Capitalism is not a social or moral system. Investment and free market competition create goods and services, and reduces costs. The common PC and cell phone are a prime example.


What to do with profits is a matter of government social policy. Hence the left right political social policy divide.

 

[Bomb#20]

In an econ class the teacher asked what is the purpose of capitalism.

I said something like provide the greatest amount of goods and services at the lowest cost.

He pointed his finger at me and said ‘Wrong! The purpose of capitalism is to make a profit.’ It took time working in technology to fully understand. Creating jobs and raising standards of living are consequences not goals of capitalism. Invest now for a greater return on investment in the future, aka profit.

Your teacher was wrong too. "What is the purpose of capitalism?" is a category error. Capitalism has no purpose. It's a spandrel. Its existence is a side effect of many independent decisions taken by many people all for their own reasons. Nobody invented capitalism; nobody established it to make a profit. It evolved. You might as well ask what the purpose of a monkey is.

 

[Don2 (Don1 Revised)]

You might as well ask what the purpose of a monkey is.

Entertainment.

 

[Loren Pechtel]

In an econ class the teacher asked what is the purpose of capitalism.

I said something like provide the greatest amount of goods and services at the lowest cost.

He pointed his finger at me and said ‘Wrong! The purpose of capitalism is to make a profit.’ It took time working in technology to fully understand. Creating jobs and raising standards of living are consequences not goals of capitalism. Invest now for a greater return on investment in the future, aka profit.

Your teacher was wrong too. "What is the purpose of capitalism?" is a category error. Capitalism has no purpose. It's a spandrel. Its existence is a side effect of many independent decisions taken by many people all for their own reasons. Nobody invented capitalism; nobody established it to make a profit. It evolved. You might as well ask what the purpose of a monkey is.

Exactly. It's a label for what happens when everyone acts in their own interests, it does not have any existence apart from this.

 

[bilby]

In an econ class the teacher asked what is the purpose of capitalism.

I said something like provide the greatest amount of goods and services at the lowest cost.

He pointed his finger at me and said ‘Wrong! The purpose of capitalism is to make a profit.’ It took time working in technology to fully understand. Creating jobs and raising standards of living are consequences not goals of capitalism. Invest now for a greater return on investment in the future, aka profit.

Your teacher was wrong too. "What is the purpose of capitalism?" is a category error. Capitalism has no purpose. It's a spandrel. Its existence is a side effect of many independent decisions taken by many people all for their own reasons. Nobody invented capitalism; nobody established it to make a profit. It evolved. You might as well ask what the purpose of a monkey is.

Exactly. It's a label for what happens when everyone acts in their own financial interests putting wealth agead of any other goals they might pursue, it does not have any existence apart from this.

FTFY.

It may seem obvious to you that pursuit of financial interests should override other interests; So obvious, indeed, that apparently it goes without saying.

But it's noteworthy that most people do not do that, and that those who do are generally no happier than those who don't, and that those who do so most successfully are often psychopaths.

Even in the most capitalistic of societies, to the horror of libertarians and objectivists, charity and selflessness still occur.

Acting only (or even mostly) from financial interests is highly abberent behaviour and does not improve the overall wellbeing of most who do so, nor of those with whom they interact.

Capitalism is good, in small doses, and when confined to its area of greatest effectiveness. It's terrible when people start to think it can or should apply to every single human interaction, or to every area of public policy.

 

[Loren Pechtel]

In an econ class the teacher asked what is the purpose of capitalism.

I said something like provide the greatest amount of goods and services at the lowest cost.

He pointed his finger at me and said ‘Wrong! The purpose of capitalism is to make a profit.’ It took time working in technology to fully understand. Creating jobs and raising standards of living are consequences not goals of capitalism. Invest now for a greater return on investment in the future, aka profit.

Your teacher was wrong too. "What is the purpose of capitalism?" is a category error. Capitalism has no purpose. It's a spandrel. Its existence is a side effect of many independent decisions taken by many people all for their own reasons. Nobody invented capitalism; nobody established it to make a profit. It evolved. You might as well ask what the purpose of a monkey is.

Exactly. It's a label for what happens when everyone acts in their own financial interests putting wealth agead of any other goals they might pursue, it does not have any existence apart from this.

FTFY.

It may seem obvious to you that pursuit of financial interests should override other interests; So obvious, indeed, that apparently it goes without saying.

But it's noteworthy that most people do not do that, and that those who do are generally no happier than those who don't, and that those who do so most successfully are often psychopaths.

Even in the most capitalistic of societies, to the horror of libertarians and objectivists, charity and selflessness still occur.

Acting only (or even mostly) from financial interests is highly abberent behaviour and does not improve the overall wellbeing of most who do so, nor of those with whom they interact.

Capitalism is good, in small doses, and when confined to its area of greatest effectiveness. It's terrible when people start to think it can or should apply to every single human interaction, or to every area of public policy.

Disagree--you will still get capitalism even when people don't put making money as their #1 goal. And it's not a matter of whether it's applied--it simply is. It's possible to choose to do other things, but that does not remove capitalism.

 

[bilby]

Disagree

Don't care.

 

[Bronzeage]

The basic principle of capitalism is a person free to exploit their own property to increase their wealth. Competition with other people doing the same thing is supposed to impose some level of efficiency so products and services are delivered at the lowest price which still makes it worth the effort.

The problem is that very fuzzy and wavy line between people's property and between private and public property. If I agree to exchange labor for wages, does my employer have the right to my health, as well? They may or may not know all the hazards of the job, but if they conceal long term hazards, they have essentially stolen my health and well being, in order to increase their profits.

As a citizen, I have a common share in the air we all breathe, or the river from which we all drink. A capitalist make reduce expenses by polluting the air or water, and by doing so is increasing his wealth by exploiting stolen property.

This problem is the bedrock of government regulations. Just as we have laws which make it a crime to move a property boundary marker, or cut down trees on someone else's land, we also make it a crime to poison people with the toxic byproducts of their efficiency.

The idea of government regulations is nothing new. One of things that inspired Adam Smith to write Wealth of Nations was the common use of government regulations to give one person monopoly over some kind of business. He saw this as inherently inefficient and produced less wealth for the whole nation, than when businesses compete.

 

[Bomb#20]

Your teacher was wrong too. "What is the purpose of capitalism?" is a category error. Capitalism has no purpose. It's a spandrel. Its existence is a side effect of many independent decisions taken by many people all for their own reasons. Nobody invented capitalism; nobody established it to make a profit. It evolved. You might as well ask what the purpose of a monkey is.

Exactly. It's a label for what happens when everyone acts in their own interests, it does not have any existence apart from this.

That doesn't really narrow it down, though. Every system is what happens when everyone* acts in their own interests. People acted in their own interests under Stalin too -- it was in his interests to murder opponents and it was in everyone else's interests to do whatever they needed to do to appear not to be Stalin's opponents. Capitalism is what happens when the people best positioned to use force on others take property rights seriously. When that happens it's usually because local social conditions are such that they perceive taking property rights seriously to be in their interests.

(* For sufficiently approximate values of "everyone". Of course there's a minority in every system who act against their own interests due to misperception, generosity or spite, but treating societies as mostly composed of people who mostly act in what they think is their own interests isn't a major source of model inaccuracy.)

 

[Loren Pechtel]

Your teacher was wrong too. "What is the purpose of capitalism?" is a category error. Capitalism has no purpose. It's a spandrel. Its existence is a side effect of many independent decisions taken by many people all for their own reasons. Nobody invented capitalism; nobody established it to make a profit. It evolved. You might as well ask what the purpose of a monkey is.

Exactly. It's a label for what happens when everyone acts in their own interests, it does not have any existence apart from this.

That doesn't really narrow it down, though. Every system is what happens when everyone* acts in their own interests. People acted in their own interests under Stalin too -- it was in his interests to murder opponents and it was in everyone else's interests to do whatever they needed to do to appear not to be Stalin's opponents. Capitalism is what happens when the people best positioned to use force on others take property rights seriously. When that happens it's usually because local social conditions are such that they perceive taking property rights seriously to be in their interests.

(* For sufficiently approximate values of "everyone". Of course there's a minority in every system who act against their own interests due to misperception, generosity or spite, but treating societies as mostly composed of people who mostly act in what they think is their own interests isn't a major source of model inaccuracy.)

The thing is it's an emergent phenomenon, not something in it's own right. As such, it's not something subject to modification. Rather, other systems must be created to accomplish that which capitalism doesn't.