AIBU to not know the point of capitalism?

[TooBigForMyBoots]

OK, so I'm not an idiot. Did politics, economics, languages and other stuff. Got a degree and everything. I've studied ideologies/religions/philosophies and lived for 50 years. Paid close attention to the news/history along the way. Somehow though, I seem to have forgotten why Capitalism is a good thing. And the actual point of it.

Back in the day, I understood it as innovation and talent being exhalted by consumer demand for the goods/services in a competitive market. Hard work achieving rewards. Demand and supply (including supply of labour) balancing out.

But it seems it is just about very rich and super rich people getting richer while those who actually work, MC/WC whatever are expected to pay. Intelligence and hard work aren't important and won't necessarily get you ahead.

Being minted and connected to politicians certainly will. Is this Capitalism in 2022? Or AIBU and missing something?

I've scrolled on, but essentially Capitalism is about free-markets.

What does a free market mean?

Economic activity is not tethered to the state.

What does that mean?

It means that individuals are not owned by government.

The idea of governance is separate from the idea of people.

I'm strongly individualistic. I'm very singular. I always have been.

I don't like pluralism.

I believe that the individual, when made strong is best, and can do best.

I think the Chinese would agree with you.

Yeah- it's great right up to the point where everyone gets put up against the wall and shot.

It's in the word, isn't it?
You have/ built up capital and accumulate a bit more throughout your working life. The more you have, the more you'll get.
The problem is if you start with next to nothing, you'll most likely end up with a bit more than next to nothing.

And the bit of capital you have is tied up in facilitating your every day life. So it's almost impossible to get more.

Rich people start off with a surplus that they can, in theory, loose. So they can more risky investments/ decisions with some of this surplus in oreder to build a bit more surplus.

Think about tne value of your home, if you had 3x this value in the bank, what would you do to grow your capital?

Your Elong Musks or Bill Gates are just a blip in the universe. Right place at the right time kind of lucky. A bit like winning the lottery, not impossible but...

Capitalism as we know it isn't about free markets but regulated ones. The state sets the limits and within that people can use their discretion on how to trade.

In the case of financial markets the regulation is enormous. The point is that without those regulations the market wouldn't work.

There are some rich ideologues who bang on about making everything truly free. But they'd be first into the cooking pot in the enlightened anarchy they yearn for

I agree, but also (I'm a scientist), separately from your point, I've always found the idea of unlimited growth in a system (the world) with finite resources to be baffling. The resources will run out. Then what?

The problem with capitalism is it relies on endless growth and consumption. It is totally at odds with our finite world. However, because humans are greedy, it is completely unstoppable until we destroy the planet. Yes, a grim view, but I stand by it.

Capitalism isn't perfect buts its the only system we have that pretty much works.

Yes, but I think there are signs that things are changing. There is the falling rate of profit with a break in the law of value. The labour theory of value is now coming to be just that a "theory" where value can no longer be created just through labour. Looking ahead we see stagnate wages, mass unemployment, increased mechanisation, AI, and automation and a withdrawal of capitalist investments into production of material goods. So much more value is created in what Virno calls virtuouosity or affective labour and creation of non material goods and services. This creates crisis but also opportunities.

Anyway, I'm not a fan of state socialism, that's just capitalism with more state intervention. For that reason I'm no fan of failed state communism (state socialism).

Ultimately capitalism itself is finite, and revolution (changes to the mode of production) happen in contradiction because the way capitalism has to create surplus value, its impulse is to cut labour costs, but in so doing eventually breaks down because value is no longer created by exploiting labour. No labour exploitation equals no capitalism.

Don't you mean that you do like pluralism?

To me pure capitalism is a theory that like many others doesn't work well in the real world - just like communism

Which is where balance regulations and government should come in

We need to balance individual and society because we as individuals are also society , we rely on each other even when we think we are strong independent individuals

All this faux dismay and wide eyed ‘I don’t know the point of capitalism’. And then some more made-up outrage from others about how bad capitalism is. This kind of stuff only comes from people in capitalist societies reaping the benefits of it. I wonder why those living in non-capitalists systems don’t feel this much loathing for this system.

Oh yes. You forgot to say the US has never allowed it to work. Nothing at all do with some animals being more equal than others in every single communist and socialist society.

It is for the benefit of the bourgeoisie/ruling class at the expense of the proletariat/ working class. The middle class is an illusion we the 99% work for the benefits of the 1% and everything else is a distraction

But we don't live in a fully capitalist society do we?

There have always been regulations - the NHS is clearly not a capitalist concept

Do our benefits come from capitalism or from the limiting structured around our brand of capitalism ?

Strange really when you think about it. Free market ideology posits the individual as competitive, and yet capitalism has made humans far more dependent upon each other than at any other time in human history. As the nodes of exchange increase, and capitalism expands in terms of space and diminishes in terms of time so does the interdependence on others.

The process of individuation stems from two things, labour processes and specialisation and from the ideologies and need for competition. So individuation appears as both idealist utopian (the far end of liberal ideals), and as a material reality. This process is inherently good and points to a future where individuals now are central to the idea of the collective. This is why identity politics is not only a pain in the arsen in terms of collective action, but also a necessary process which is beneficial. The idealist liberal theory of the individual apriori to society is a brilliant thing.....except under capitalism it can never be fully realised. No man actually exists either apriori to society, or outside of it. We play lip service to this ideal because capitalism must create the conditions of competition and the ideology that competition is a natural phenomena born into the human individual apriori to society.

What if in actual fact the dependence inherent under capitalism is nearer to human nature? So we are inherently cooperative? can we tell? I'd argue yes we can simply by looking at the biology of humans. We are not born standing for a start! but also because the labour process under capitalism has created greater cooperation and dependence. Cooperation is hidden in the complexities of the Labour process and in the increasingly complex process of exchange, ie we have created extended circuits of exchange (transport, infrastructure, investments, shares, financial products, globalisation, service sector, pensions, marketing, social media, etc). It hides the very thing it creates.....connection, cooperation, and inerdependence. This paves the way to something else......but if I suggest this I'll get a pile on of anti commie rhetoric.

There is an alternative, but its not so much an alternative as an almost inevitable outcome.

I think capitalism means the people who have money choose how to invest it to get the maximum return. It's an alternative to socialism in which a government will make such decisions.

In general free markets work far better than any single mind (or organised group of minds) at optimising economic outcomes, and the problem of allocating capital in the best way is just one instance of this. (Allowing market forces to prevail in other areas, such as pricing labour, is also a good idea.)

Capitalism is the natural state of things, once the concept of property exists. If you want socialism, you need strong government who control men with guns to override capitalism. Socialist governments have been very oppressive.

I think not European countries are socialist, by this definition. All the countries that UK lefties longingly admire, Sweden for example, are actually capitalist. I think the countries that conform to this definition of socialism are the ones we think of as communist.

I don't think there's really a "point" to capitalism in the way you put it: that's critical to understanding it. Unlike socialism or other ways of providing economic structure is it not explicitly designed to achieve an economic goal. It's more a way of seeing how elements work together in an economy.

It rests of the belief that the profit motive and the ability of private businesses and individuals to set prices according to supply and demand is the most efficient way for the economy to function.

It's specious because it ignores the fact that there's a political impetus behind capitalism. It also fails to acknowledge that the market fails in many cases and it reliably makes rich people rich far faster than it makes poor people rich.

So I'm by no means an uncritical fan of capitalism. It may many problems. But I think the reason it has been so successful is in large part because it is much more efficient than socialism.

Its based on the "trickle-down" theory which is situation where a number of people or corporations completely own the means of producing stuff

Trickle down theory is not the basis for capitalism. I've just googled to check the definition, and apparently it's a theory that tax reductions for the rich will also benefit the poor.

An economist I follow on Youtube says that there's no such thing as the "trickle down" theory, in that no economist has ever supported such a theory. He claims that the phrase "trickle-down" is only ever used by lefties as a straw man in order to discredit the right.

And it so clearly doesn't work.

If the bulk of wealth is in the hands of the few, it can't trickle down. There's a limit to how much even the most conspicuous gazillionaire consumer can buy, how many service industries they can access, how much wealth they can trickle down, day to day. Essentially, the money gets tied up in investments.

Meanwhile thoser making the money for the superrich are on pittance wages so can't afford clothes, books and magazines, eating out, sports equipment, new decor for their homes, entertainment etc so there is notably reduced consumption by the masses.

What we need is more affluence across all sectors of society - good pay for ordinary jobs; shorter hours with more people employed in each sector, giving us more money and more time to spend it, so the money circulates. Meanwhile all services that are necessary for a society's infrastructure to flourish: public transport, health, education, sanitation, utilities and social housing need to be withdrawn fronm the for-profit sector and run hyper-efficiently with the focus on emplying enough people to keep them safe and operating smoothly. If we were all better paid, we'd be paying the tax to fund this.

I know that;s a miasive oversimplification, but it can't be worse than how we currently operate.

Then it clearly doesn't work. The most undesirable jobs with heavy lifting, dealing with disturbed people in various stages of hygiene - carers, prison officers, nurses - are paid a pittance.

Meanwhile people in management spend their lives drifting from one blue-sky-thinking catered meeting in an air-conditioned office to another, on six figure salaries, working out how to drive down the wages and up the unwaged hours of the ones wiping adult bums and preventing suicides.

The biggest problem for me with capitalism at the moment is that we are completely ignoring global issues (warming planet, world poverty) because we cannot stop mass producing + consuming (the two things that are essential for capitalism).
It's a vicious circle and we are pedalling the wrong wheels.

What kind of government interventions would level the playing field? This is a genuine question.

Carers get paid crap money but the opposite of carers isn't highly paid corporate management, it's highly qualified doctors, surgeons etc who's skills and expertise are absolutely vital.

Where do experienced doctors, teachers, scientists, public health experts etc sit on the scale? Surely there are more of them than there are multi millionaire business owners.

I'm private sector and my bosses are wealthy but they deal with so much stress. They built up the business over decades at their own personal risk, and they pay us all well for our work. I find the idea of heartless rich bastards to be laughably simplistic. Most new businesses fail, anyone can have a go if they want. My friend runs her own business and she never rests. Support local business sounds so positive, yet business owners are cast as Dickensian baddies.