The Problem With Capitalism

A few of your premises are immediately identifiable as wrong (although you are right insofar as some things will inevitably change in the future).

The world population is certainly not growing at an exponential rate. It is growing at its current rate because there is enough food produced (... by the capitalists). Ironically, the regions where population growth is biggest are not hte biggest producers of food (they're actually among the smallest). The people in the regions where population grows fastest only survive because they are being fed by the others. They produce more children and cry for help, and get more food. End capitalism, end this feedback cycle, and it all collapses.

Fewer people being needed to produce goods is a truth, but there are more (useless) goods than ever produced. Also, the "idea" that the people who think they can shape tomorrow have in mind is that humans shall no longer do the robot work, but will do the creative stuff. That's somewhat utopic because 90% of the population is just too useless for that, but if the automation trend continues, things will will eventually have to go in that direction.
It is however not certain that the automation trend goes on with the same speed forever. The extrapolation from "soda" via "burgers" to "everything" may not hold.

The assumption that production cost is linked proportionally to salaries is not true (it is true within some bounds, but not alltogether), as is the assumption that you will be able to buy e.g. a large TV for $1. Even now markup is huge already (and has been for decades), the cost of production is a tiny fraction of what you pay for goods. It depends, on some goods (say, milk) it's only 50%, but on some goods (books, CDs) it's easily 1,000%. When you buy the newest "GPU Pro" book or such which costs you $75, do you really think the authors get much more than $2 from that, and that it costs more than $5 to make the actual book, altogether? Note that the Kindle version which doesn't include a physical book and has no additional "production work" costs almost the same (8€ difference here).

Regardless of what happens in 50 or 100 years (that's an awfully long time to forecast!), people will still have greed, so money will be needed, and people will have to be able to earn money. People will still want to identify themselves as "something better" in comparison to everybody else, which doesn't work if everybody is equal, or if nobody owns anything (or if everybody owns the same).

Extrapolations are fine and Dandy... but they often forget the human factor.

See Trump being still a candidate. Yes, in hindsight you should have seen that coming, with the political climate change in the US and the "silent majority" and whatnot. A simple extrapolation like the "more work being done for less = Stuff is trending towards being free to produce" and "robots replacing humans somewhere = robots replacing humans everywhere" is more akin to "Trump is to stupid to finish a single sentence and manages to offend 5 minorities in one word = he will not get far"... and we have seen how well that "extrapolation" held up.

Don't get me wrong, I would love a future where robots take over. I welcome our new overlords. And I wouldn't say no to free goods. Or, to be more serious, or current rotten capitalistic system being replaced or at least being evolved into a system that is inclusive for more people.

But I think the future is becoming only harder to foretell the faster technology evolves, and the more unstable the political climate worldwide becomes.

I sincerly hope we do not, but I cannot shake the feeling we are steering into the next crisis of sorts at full steam. Best case scenario is another economical crisis (maybe this time caused by political instability even in some countries stable up to now, not by people in the financial industry messing up)...

Worst case scenario WW3? Yes its unlikely, still, with all the dictators rising up in the last few years, and even the "democratic" or at least "commite led" Superpowers like the US and China becoming more and more ego centric in their foreign politics, the chances are rising that a war somewhere might turn into something bigger.

Which again would throw all this predictions off the mark. Capitalism triumphs thanks to the resulting set back.

TL;DR.

Maybe you'd like to try that in a couple of sentences.

You sound like one of those Basic Income nut jobs.

Work for your money.

TL;DR.

Maybe you'd like to try that in a couple of sentences.

You sound like one of those Basic Income nut jobs.

Work for your money.

It never ceases to amaze me how some people seem to actually get offended by *any* insinuation that this world can get better/more fair.

I'm not talking about people that say "it would be nice, but utopic, etc"...I'm talking about people that actually seem to not *want* this, even if it would be feasible. And they get genuinely angry at anyone that suggests any change towards that goal could happen.

And it's usually people that would actually benefit from the world getting more fair.

Has anybody studied this phenom, cause it's really weird :P

TL;DR.

Maybe you'd like to try that in a couple of sentences.

You sound like one of those Basic Income nut jobs.

Work for your money.

That's not really worth posting and doesn't add anything...

As a result of #1, fewer people are required to produce goods.

This has already happened and changed things greatly. The US used to be a manufacturing nation, now they're a financial services nation. There's more people who's job is to do nothing but move around imaginary money (loans, backed by smaller loans) than there are people who actually make stuff.

Customer service, retail, call centers, tech-support, brokers, etc, etc... These are all jobs that don't really fit into the kind of thinking that's underlying the manufacturing mindset in your post.

See: http://www.economist.com/blogs/freeexchange/2013/08/labour-markets-0

The beneficiaries of these production pipelines are the owners of these businesses.

This is the key struggle of capitalism which has been completely purged from American zeitgeist. It is scarily like newspeak from 1984, where the vocabulary has decayed, precluding thought on the topic.

The core struggle of capitalism is how do you reward or balance the power/value of capital vs labour?

In a laissez-faire, unregulated economy dominated by existing power, capital will take all of the power for themselves, and work as hard as they can to suppress the power of labour, working towards creating instability in the average worker's life, to make them into a "wage slave".

If a communist economy ruled by socialist fanatics with a democratic streak, capital will be raped by labour and all power returned to the masses (until the fanatics don't want to share, at which point their authoritarian streak crushes the democratic part...)

Any healthy capitalist country is in a careful balance between the two extremes, trying to somehow define a "fair" split between rewarding labour and rewarding capital.

Note that the US is in a terrible state because in the past 50 years it's abandoned all pretence of maintaining a balance here, and like I said, the vocabulary to even discuss this struggle has been erased, meaning that it's never even discussed. You just end up with fanatics like Milton here, who flip out at the opening of a discussion, switch to some other debate that they hold preconceived ideas about, and shout down the obviously stupid other side.

samoth leaned it back to reality in an elegant manner.

Whenever I see this expressed, I envision the picture Gene Roddenberry painted of a possible future society.

The other thing I think is the saying, "In order for someone to win, someone has to loose"

Good morning read. Thanks slayemin.

Go easy on the harsh ...Milton

edit:

damn Hodgman...slap and an undercut. nicely done. :)

The other thing I think is the saying, "In order for someone to win, someone has to loose"

If you look at the world, say, 500 years ago, one would say nearly everybody is living better lives now.

It's not a zero sum game. These things don't happen overnight, of course, but nothing wrong in having a "utopia" in mind, even for the very far future, even if it's never fully realized. It keeps you fixed on a steady direction of progress.

Whenever I see this expressed, I envision the picture Gene Roddenberry painted of a possible future society.

Go easy on the harsh ...Milton

Gene was an idiot (However much I like Star Trek).

Why would anyone serve? On Star Trek there are a lot of people that do menial jobs. Why?

I'm guessing because they need money...

Because they go to space, man!

I mean, there are people with billions that still go to the office everyday to do some bullshit job pushing numbers. Why do they do it? They couldn't even spend all their money if they wanted to. Why does Buffet do it? Why don't they just cash in and go lie on the beach all day?

TL;DR.

Maybe you'd like to try that in a couple of sentences.

You sound like one of those Basic Income nut jobs.

Work for your money.

It never ceases to amaze me how some people seem to actually get offended by *any* insinuation that this world can get better/more fair.

Well? How does it get more fair? Basic Income is nut jobs wanting money without working.

So you're okay with a basic income for children then? Or are you of the opinion that a kid should be punished if their legal custodians have no talent in making money?

Children should get child care. So every child gets the same.

But you can't expect free money once you're an adult.

Whenever I see this expressed, I envision the picture Gene Roddenberry painted of a possible future society.

Go easy on the harsh ...Milton

Gene was an idiot (However much I like Star Trek).

Why would anyone serve? On Star Trek there are a lot of people that do menial jobs. Why?

I'm guessing because they need money...

Because they go to space, man!

I mean, there are people with billions that still go to the office everyday to do some bullshit job pushing numbers. Why do they do it? They couldn't even spend all their money if they wanted to. Why does Buffet do it? Why don't they just cash in and go lie on the beach all day?

People with billions can do whatever they like.

This OP is obviously a 'Basic Income' advocate. They just want free money to do whatever they like, and have robots do the work.

Grow up.

This OP is obviously a 'Basic Income' advocate. They just want free money to do whatever they like, and have robots do the work.

Grow up.

So let's say, for argument's sake, that in 50 years it is actually possible to have robotic "slaves" that produce many goods and services, in such a capacity that it allows us to cover the basic needs of every person in Earth, regardless of whether they work or not. Some people might actually choose to do some work for personal gratification, or to gain access to extra luxuries, or both.

You're saying you would actually outlaw this, so that everyone *has* to work for their food, even if it's no longer necessary?

This OP is obviously a 'Basic Income' advocate. They just want free money to do whatever they like, and have robots do the work.

Grow up.

So let's say, for argument's sake, that in 50 years it is actually possible to have robotic "slaves" that produce many goods and services, in such a capacity that it allows us to cover the basic needs of every person in Earth, regardless of whether they work or not. Some people might actually choose to do some work for personal gratification, or to gain access to extra luxuries, or both.

You're saying you would actually outlaw this, so that everyone *has* to work for their food, regardless if it's no longer necessary?

Of course not. *When* robots can take care of us, money is irrelevant.

Until then. Capitalism rules.

This OP is obviously a 'Basic Income' advocate. They just want free money to do whatever they like, and have robots do the work.

Grow up.

So let's say, for argument's sake, that in 50 years it is actually possible to have robotic "slaves" that produce many goods and services, in such a capacity that it allows us to cover the basic needs of every person in Earth, regardless of whether they work or not. Some people might actually choose to do some work for personal gratification, or to gain access to extra luxuries, or both.

You're saying you would actually outlaw this, so that everyone *has* to work for their food, regardless if it's no longer necessary?

Of course not. *When* robots can take care of us, money is irrelevant.

Until then. Capitalism rules.

I believe the OP was saying just that, that such a future is actually feasible in a few decades, provided technology advances in reasonable pace, and is something capitalism can't handle, in which case it would either be substituted by another system more equipped to handle the new situation, or start another large-scale war in order to destroy resources and "reboot", so to speak.

The question is, of course, whether you want to sit and wait for when we reach that junction, or start preparing the successor of capitalism today, so it's ready to fully handle the new situation when it arrives, and also maybe accelerate its arrival. Don't forget that "when machines can take care of us" isn't a singularity, it won't happen overnight, it will be a continuous event, even if it will unfold rapidly, say in a period of a few years. They are already taking care of us, to some extent. Forget basic income. Are you sure that, at least the nutrition needs of every person on the planet can't be covered *today*, with the resources we have? And if they're not, what's the cause of that?

People with billions can do whatever they like.
This OP is obviously a 'Basic Income' advocate. They just want free money to do whatever they like, and have robots do the work.
Grow up.

The OP is clearly talking about a future where capitalism is no longer tenable. So how you jumped to the conclusion that you did and justify the tone of your rhetoric is a bit baffling.

Isn't a dwindling supply another reason why capitalism would be unwound? Especially if the workforce is taken over by robots and people are left to do nothing else but consume.

I have excised several inappropriate posts and their resulting mostly-tangential discussion. I'll re-open the thread for now.

Please remember to be nice; discuss the issue, don't fling personal insults and names at eachother.

Well I missed the entire flame war it seems, but my own opinion is divided. As an ardent supporter of capitalism, I will be the first to say it won't last, just like every system. Over time things change and we change with them. Most of manufacturing is becoming more and more automated as is, and let's not forget the idea that 3D printing may actually change manufacturing forever. Ultimately simple repetitive tasks will be automated, let's not kid ourselves. I just recently read that Singapore is going to introduce robot taxis. That's the sort of thing that would replace humans right there.

We aren't too far off from that day. But at the same time, robots and associated things are still plenty dumb, and then there's the entire notion of security with so many robots wandering around (imagine a hacker in control of an taxi?). Money won't necessarily be irrelevant. Why does money exist? Because there is scarcity in resources. We trade because of scarcity. Wherever scarcity exists, money, and by extension capitalism, will still work/thrive. Let me put it this way: if we can build everything with robots but we still need a power source to do it/power is scarce, then you need trade/money. That being said, we are nearing the ability to create systems that will be fine tuned enough to give everyone enough. Charlie Stross had a book called Accelerando that dealt with similar ideas.

Society itself would be fairly different at that point. The hard part about speculating is that we don't know of what would've happened at that point. Say if population shrank a lot suddenly for example. So there are many unknowns in that sense.

I think in the next few decades the space industry could fill a large employment gap, this is reliant on a highly motivated population to kick start it.

Access to quality education has never been so important.

Also, as the modern era moves forward the quantity of existing creative media (tv shows / games / movies / music) increases and thus new media that doesn't push boundaries has a lower value. However, this has already been realized by the creative industry and they are taking steps to control content availability so backups are not kept by the average viewer.

I like to be wrong and welcome it, because it means any beliefs I held were wrong and I can be corrected via healthy debate.

TL;DR.

Maybe you'd like to try that in a couple of sentences.
You sound like one of those Basic Income nut jobs.
Work for your money.

This isn't a post about basic income, though that may be how you want to frame it. I see basic income as another form of mandated welfare, and there are some problems with that such as, who pays for it? where does the money come from? How does that effect inflation? Basic income is more of a poorly conceived patch to address the inevitable slide of a capitalistic economic system, where all of the wealth gradually trickles upward to the owners of the businesses. A capitalistic society necessarily depends on the whole population having capital which can be spent to purchase consumable goods by those who produce it. Every time a rich business owner collects money and doesn't spend it, it takes that money out of economic circulation. As they get better and better at extracting money from the rest of the population, gradually there is less and less money remaining to extract. Basic income partially addresses this problem. However, you're still looking at this from a capitalistic framework and value system. As I hinted at in my original post:

"In our current worldview and value system, that's kind of hard to comprehend and respect, but that could very well become the norm in the future".

There is a good possibility that once capitalism itself becomes a deprecated economic system, currency itself will be a moot point, so the idea of basic income would be nonsense anyways -- Basic income in a non-capitalist economic system makes no sense. However, for the proponents of basic income, it would be interesting to feed that policy into the real time simulation to see what the long term effects of that policy would be. My prediction? It just continues to feed the rich and ultimately becomes unsustainable as unemployment gradually rises to 80%.

A few of your premises are immediately identifiable as wrong (although you are right insofar as some things will inevitably change in the future).

The world population is certainly not growing at an exponential rate. It is growing at its current rate because there is enough food produced (... by the capitalists). Ironically, the regions where population growth is biggest are not hte biggest producers of food (they're actually among the smallest). The people in the regions where population grows fastest only survive because they are being fed by the others. They produce more children and cry for help, and get more food. End capitalism, end this feedback cycle, and it all collapses.

I think a Logistical Curve would be a better model for population growth, which does have an exponent in it. Our world has a human population carrying capacity, and we're rushing towards it. The carrying capacity is determined by our ability to grow food, provide homes and shelter, and by our ecological health (more pollution = lower carrying capacity). The scary part about the carrying capacity is that as we begin to reach the asymptote, more and more human beings will suffer as we all barely get by and survive. But, none of that has much to do with the problems of a capitalistic economic model. You would have the same problem in a non-capitalist society. One interesting observation is that as a society goes more "modern", the birthrate declines substantially. Japan currently has a crisis where the birthrate vs deathrate is negative and population is declining. Is this the fate of all modernizing societies, or just something particular to japanese culture?

Fewer people being needed to produce goods is a truth, but there are more (useless) goods than ever produced. Also, the "idea" that the people who think they can shape tomorrow have in mind is that humans shall no longer do the robot work, but will do the creative stuff. That's somewhat utopic because 90% of the population is just too useless for that, but if the automation trend continues, things will will eventually have to go in that direction.

It is however not certain that the automation trend goes on with the same speed forever. The extrapolation from "soda" via "burgers" to "everything" may not hold.

I mostly think that we human beings are ultimately creative people and need to creatively express ourselves. We need a creative outlet. I think *this* is the core reason why games like Minecraft thrive: They provide a creative outlet for people and a means for people to share their work with others. People don't necessarily have to be skilled artists, and the definition of "art" can be a lot more loosely defined as a "creative outlet" rather than the traditional art we think of. But hey, even if people decide they don't want to spend their life exercising their creative needs, they can spend that time doing other things, like spending a majority of their time with other people, or going on nature hikes, or consuming entertainment. The question is, what do you do with your abundance of time if there is no work left to occupy it?

The assumption that production cost is linked proportionally to salaries is not true (it is true within some bounds, but not alltogether), as is the assumption that you will be able to buy e.g. a large TV for $1. Even now markup is huge already (and has been for decades), the cost of production is a tiny fraction of what you pay for goods. It depends, on some goods (say, milk) it's only 50%, but on some goods (books, CDs) it's easily 1,000%. When you buy the newest "GPU Pro" book or such which costs you $75, do you really think the authors get much more than $2 from that, and that it costs more than $5 to make the actual book, altogether? Note that the Kindle version which doesn't include a physical book and has no additional "production work" costs almost the same (8€ difference here).

I'm not so sure about this. Imagine that you can produce a 52 inch television screen for pennies (or some commodity everyone wants). You've completely mastered the resource supply chain and production by automating every aspect of the resource gathering and production of the television set. You could make ten million television sets at extremely low cost. Let's pretend that you do this for ten years, and you've saturated the market with your high quality television sets. Pretty much everyone and their uncle has one now. If you're in a capitalistic society, you'd want to keep selling television sets. Since everyone has one already, the available customer base will shrink very drastically. In order for you to continue making sales, you have to drop the price of your product. Let's say that you're also not alone: Every producer of goods has pretty much eliminated human beings from the production line at every step of the production. That means you don't have to pay anyone, but that also means very few people get paid. Unemployment is 80%. If you want to sell a television set to the average consumer, you'd keep dropping your price until most of these unemployed people can purchase one. If it costs you pennies to make a television set, and you sell it for a dollar, your profit margin is still 50-90x the production cost.

Regardless of what happens in 50 or 100 years (that's an awfully long time to forecast!), people will still have greed, so money will be needed, and people will have to be able to earn money. People will still want to identify themselves as "something better" in comparison to everybody else, which doesn't work if everybody is equal, or if nobody owns anything (or if everybody owns the same).

Capital greed is meaningless in a non-capitalistic society, but there are other ways for people to distinguish themselves as being better or above someone without comparing economic status (just look at the social dynamics of a high school). You'll still have celebrities and people will still crave attention and social validation, which could turn into the new greedy pursuit.

Hodgman touched barely on a topic I want to expand on: BALANCE.

Markets are self regulating towards balance. People keep laughing at this idea because Adam Smith introduced the notion of an "invisible hand" which was like a benevolent God that made everything workout. And history proved him wrong, but he was right that markets are self regulating. It's just that it doesn't work they way he thought.

The problem with self regulation and balance is that they are amoral: If I grab a bowling ball, take an elevator 12 floors to the rooftop; gravity dictates the ball will try to find balance by falling to the floor. It may take a thousand years until the building begins to decay and crumble until finally the ball falls (or an animal grabs it). Eventually, all things that go up, must go down.

But here's the thing about balance: If the ball falls from the roof down 12 floors, the Law of gravity doesn't care if there just happened to hit a passerby and get his skull cracked open at 60 m/s. It also doesn't care if a children was there seeing the whole thing and getting traumatized. Gravity doesn't care. It won't move the ball to avoid hitting any passerby. All it cares is about balance. The best we can do is blame the guy who took the ball 12 floors through the elevator and irresponsibly left it there.

Again, it could take a thousand years for the ball to find balance. But it will happen.

Same happens with markets. Thousands of irresponsible greedy people that don't measure the consequences of their actions leading markets to a state of imbalance, until the balance eventually happens: leading to massive inflation, massive job layouts, and/or business getting close, etc.

But this isn't a problem of capitalism. Every system that works with a human component is prone to abuse due to lack of responsibility or moral values.

The ultimate goal of capitalism is to produce goods with as little cost as possible and sell them for as much as possible

This is blatantly incorrect.

Capitalism is a form of leaving where wealth is determined by the accumulation of something we call "capital".

It just so happens there are irresponsible greedy people who want to accumulate a lot more capital they'll ever need to live a life full of incredibly excess. Producing goods at the lowest cost and selling them for as much as possible without thinking of the consequences just happens to be a highway towards that egocentric goal.

That's not a problem within Capitalism. It's people. If we look at Socialism: the ones controlling the State (and their friends) happen to live considerably more comfy than the rest, even though this is not what the system dictates. I've heard Meritocracy being pointed out as the solution, but it has the same inherent flaw: replace "capital" with "knowledge". Those with lack of moral values but who are knowledgeable will try to amass it for themselves and deny it to the rest, in order to hold more power and live more comfortable lives. Same with anarchy: some people will organize themselves to gain advantage and try to oppress others so they can live better.

Anarchists believe "some day" mankind will be evolved enough for everyone to be kind for others and when that happens anarchy will lead to an utopia. The problem is, if mankind ever reaches such form of evolution, then any system (Capitalism, Socialism, Meritocracy, Anarchy) will work just fine.

3. The world is becoming increasingly globalized, such that multinational corporations can have business operations in multiple countries. Manufacturing is done in parts of the world where it is most economically efficient, where labor is cheap and ecological laws are lax. Sales are conducted online and the transaction takes place in countries with the most generous tax laws.

You're assuming it will stay forever like this while the rest of the capitalistic world crumbles.

China is already struggling to keep this unfair competitiveness that is key to your idea of capitalism failing. China has imposed restrictions on the acquisition of USD for their inhabitants and specially to foreigners, strongly watching and controlling the USD / CNY exchange rate. They're artificially causing the imbalance because it benefits them. It can't stay like that forever. When balance strikes, their economy will be shaken, and so will the rest of the world.

Not to mention, many countries are taking steps towards protecting their economies from this unfairness. Some violate WTO regulations, some operate within its limits. Not every government watches idle.

6. The "work" people will do in the future will skew towards work which just isn't economically feasible or possible to replace with robotics or machines. If a coke machine can dispense soda, then a machine could also dispense cheeseburgers. If McDonalds can figure out how to automate hamburger production down to a machine, they would... provided running the machine is cheaper than paying a small staff an hourly wage barely above minimum wage. 95% of what few jobs remain will become service industry jobs (retail will mostly be replaced by online shopping).

Just a small question: if machines do everything that can be sold and nearly everyone's unemployed, where will the unemployed get the money to buy that stuff being sold?

If no one is getting money to buy, no one buys. If no one buys, prices drop and no businessman will even care to invest in those business and robots. They'll go broke.

If business are broke and people is unemployed... then what? Nobody will hire so nobody will work? Nobody will do anything? Everybody will just wait idle until they go famine and die?

But let's suppose we live in a future where everything is made by machines and given away for free. Your idea is sustained by the notion that prices will drop to 0 or nearly 0 because of supply; but such thing not only needs robots doing everything, it also requires unlimited supply of resources. This is wrong. Electricity isn't unlimited, gas, oil & fuel aren't unlimited, neither are raw materials, meat and agriculture.

so normally if we took our existing capitalistic framework / worldview and applied it to this future scenario, it would seem like a dystopia with a lot of doom and gloom.

Here's the problem with a gloom and doom scenario: it's also not balance. A perpetual dystopian state of affairs is an imbalance. It may last a thousand years, but it's destined to improve. Just like the middle age ended and the '29 crisis was averted, so will future crisis.

You're right we have a lot of problems (countries outsourcing to cheaper countries, robots replacing people on repetitive tasks) and we're reaching a point where a lot of current global issues are about to blow in our faces ("about to" could be in 80 years, 500 years, or tomorrow). When it blows up... people will suffer, people will die, few people will win. But we'll also recover. Some of us may not see through it, many will. That's just the cycle of life.

People have been calling out the end of capitalism and proposing alternatives for centuries now. Funny part is, these alternatives have failed where capitalism yet stands. It's proven so far the one that sucks less. Hybrids have also succeeded (i.e. capitalism with social policies in nordic countries)