I admit that I've had some doubts over the years but I always remember Mises motto and it compells me to study harder to clear my doubts with logic and reason.
After being a socialist, it's very hard to doubt capitalism.
Freedom has always been the only route to progress.
Yes, but then I just try pretending that I am a socialist; I think hard about how it would work; I state that my doubts about Socialism are approximately a 1000 times stronger and that nearly nothing makes any sense. Then I revert back to capitalism.
Felipe, why do you doubt capitalism?
To paraphrase Marc Faber: We're all doomed, but that doesn't mean that we can't make money in the process. Rabbi Lapin: "Let's make bricks!" Stephan Kinsella: "Say you and I both want to make a German chocolate cake."
Daniel Muffinburg:Felipe, why do you doubt capitalism?
I for example don't understand why capitalists wouldn't constantly form cartels in markets with relatively strong barriers to entry, since they should all be aware that they are all better off if they don't let the price collapse. They could hand the decision over to computers to make sure that they don't screw each others over.
Nero,
Rothbard says that historically, unless enforced by law, cartels fall apart because it means someone is losing money. He could be making more undercutting his fellows and charging less, getting more customers that way. And sooner or later, that is exactly what happens.
http://mises.org/rothbard/mes/chap10b.asp
https://mises.org/media/3686
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It's easy to refute an argument if you first misrepresent it. William Keizer
Sometimes you meet this socialist that has absolute certainty about his system, that never quits the debate, and although his arguments for the most part are weak while you write the refutation to his points you cant help but think what if the LTV has some truth to it? what if free will doesnt exist and society somehow manipulate us?
Sounds silly I know.
EmperorNero: Then you just secretly hack the computer and pay the hacker from the profits thus earned. No matter how you construct the cartel, the fact remains that the more successful and cohesive the cartel, the greater the benefits to be had from cheating. It should be obvious that a system which, by its very nature, becomes more vulnerable to collapse the more success it achieves, is inviable.
Clayton -
Felipe:what if free will doesnt exist and society somehow manipulate us?
Smiling Dave:Nero, Rothbard says that historically, unless enforced by law, cartels fall apart because it means someone is losing money. He could be making more undercutting his fellows and charging less, getting more customers that way. And sooner or later, that is exactly what happens. http://mises.org/rothbard/mes/chap10b.asp https://mises.org/media/3686
Heh... "and then they all hate each others". Nice.
It's just something I don't understand about capitalism. I know the empirical evidence confirms that it doesn't work. But they should all be rationally aware that they would earn more by cooperating with the cartel than if they tried to get a little more and cause the cartel to collapse. If they are rationally aware of that they could somehow coordinate the cartel to not break down. I guess it's a good thing that people can't get along.
what if the LTV has some truth to it?
But how could it have any truth?? Valuation is something that happens inside your head. Look at all the great projects in history which were begun and abandoned, surely they must be of great value given how much labor was poured into them, no?
what if free will doesnt exist and society somehow manipulate us?
Well, society definitely does manipulate us as our brains are wired to be manipulated in certain ways. But free will also certainly exists. Nobody can force you to choose white or wheat bread next time you visit the grocery store.
Don't give up, stick with it!
they should all be rationally aware that they would earn more by cooperating with the cartel than if they tried to get a little more and cause the cartel to collapse
No, you're missing the point, they earn the most if the cartel doesn't collapse and they get to cheat a little on the side. Since each member faces the same incentives, they all end up cheating to one degree or another and this is the very thing that collapses the cartel.
capitalism or freedom?
Is there a difference? there must be otherwise you would have used the wrod freedom. And all these newspapers would use the word freedom to demonize instead of capitalism.
I sometimes doubt capitalism. And then I think of the alternatives.
Clayton:they should all be rationally aware that they would earn more by cooperating with the cartel than if they tried to get a little more and cause the cartel to collapse No, you're missing the point, they earn the most if the cartel doesn't collapse and they get to cheat a little on the side. Since each member faces the same incentives, they all end up cheating to one degree or another and this is the very thing that collapses the cartel.
Yes, I said it wrong. I meant that they earn more if they don't cheat and the cartel remains intact than if they cheat and the cartel collapses. So their rational self-interest would be to restrain themselves from cheating. I know that in reality they will cheat, but it's a thread about doubting capitalism. I just don't understand why they wouldn't figure out some way to organize the cartel.
Edit: You are right, of course, that the more sucessful the cartel the greater the incentive for cheating is. So there is a market force that takes care of it. It's just, if everybody know that, why can't they act to negate it?
Nero.
There is a law of supply and demand that deteremines a price, say $10. Cartels want to force the price to be $15, say. By the same law of supply and demand, less people will buy the product at that price. Which often means loss of profit.
Now the one who will benefit most by a cartel is clearly not the fellow who will thrive under free market conditions. It's the one who is the inferior businessman, that needs protection from his competitors. He is the one who wants the cartel, and the superior businessmen will eventually opt out.
Now Rothbard writes that if the cartel really does benefit them all somehow, then that means they should merge outright. Haven't investigated that.
Before I discovering this website I was filled with doubts, now I juSt don't give a damn.
Felipe, I imagine you're having doubts because you've debated witha socialist? I personally recommend you buy them a copy of Manifesto and let them be. I've been debating some people last night and I've concluded that they're hopeless.
They don't really care about my arguments. The whole debate was a complete ad hominem.
I've been called so many things, it's really amazing. Last night I was callled a capitalist pig(cochon capitaliste, in french), bussiness apolegetic, supporter of the new Jewish world order( I couldn't beleive they said that, especially after I brought up the calculation problem of Von Mises), hearthless insensitive human being etc...
Then there's the intelligent socialists, you knwo.. the ones who are aware that they're arguments are flawed so they make sure the whole debate evolves around semantics.. I hate those the most. They dodge every question and only answer those they please in the way they please. I find them dishonest and wastefull.
Then there's the ones that constantly repeat slogans. This friday , there's the next debate and one my opponents said "I'll bring all of Marx's works to shatter this guys arguments". Literary, all they do is quote passages from the Bible..hhum.. sorry Manifesto.
"Hey Francois, I've been explaining why the LTV is flawed for 30mins now" To which he replies:"Behold, Marx said "From each according to they're abilities to each according to they're need" , now you see Drewie why Socialism is more humane, no more exploitation"
Also, concerning certainty, have you ever met a zealot who doesn't have absolute certainty about they're beleifs? Fanatics tend to do that.
You are right, of course, that the more sucessful the cartel the greater the incentive for cheating is. So there is a market force that takes care of it. It's just, if everybody know that, why can't they act to negate it?
Because, as Mises said, humans act. Groups do not act. Cartels do not act. Only humans - who can have ends and choose means to achieve those ends - act. Collectivism is not so much a bad political system as it is a myth... there just simply is no collective as a telic entity. There is no general will, even in a group of two or ten.
I get called a true believer because I argue for free markets. Insensitive, unhuman, crazy, etc. It's pretty funny. Oh the best one is biased, as though the people on the other side are not.
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Yeah, I’ve now come to fear that anarchy could indeed turn into rule by local crime syndicates. The mod would take over. In itself that would not be a problem, if aggregation for that point on into large states wasn’t inevitable. Perhaps, just perhaps, a short time of freedom is all we can hope for. Otherwise, no doubts whatsoever.
As Hoppe has documented, feudalism is a lot less parasitic than modern democracy. The king could hardly tax 5% and 10% increases in taxation could unseat him from the throne. The feudal lords were frequently at war but they didn't mess with commoners for the most part because the commoners were part of the capital value of the feudal lands. All things equal, I would much rather live under a feudal system than the highly centralized democratic socialism we live under today which consumes literally half of all economic production. A medieval king could not even have dreamed of a 50% tax rate.
Literary, all they do is quote passages from the Bible..hhum.. sorry Manifesto.
You might like this quote from Bertrand Russell:
To understand Marx psychologically, one should use the following dictionary: Yahweh=Dialectical Materialism The Messiah= Marx The Elect=The Proletariat The Church=The Communist Party The Second Coming=The Revolution Hell=Punishment of the Capitalists The Millennium=The Communist Commonwealth
The terms on the left give the emotional content of the terms on the right, and it is this emotional content, familiar to those who have had a Christian or a Jewish upbringing, that makes Marx's eschatology credible. A similar dictionary could be made for the Nazis...
Clayton: Yeah, I’ve now come to fear that anarchy could indeed turn into rule by local crime syndicates. The mod would take over. In itself that would not be a problem, if aggregation for that point on into large states wasn’t inevitable. Perhaps, just perhaps, a short time of freedom is all we can hope for. Otherwise, no doubts whatsoever. As Hoppe has documented, feudalism is a lot less parasitic than modern democracy. The king could hardly tax 5% and 10% increases in taxation could unseat him from the throne. The feudal lords were frequently at war but they didn't mess with commoners for the most part because the commoners were part of the capital value of the feudal lands. All things equal, I would much rather live under a feudal system than the highly centralized democratic socialism we live under today which consumes literally half of all economic production. A medieval king could not even have dreamed of a 50% tax rate. Clayton -
I fully agree, but still we know that states tend to aggregate. So a world of crime syndicates (feudal manors) would probably turn into nation-states again, and that is my problem. Still I wouldn’t mind 300 years of decentralization. And perhaps nukes could make aggregation much slower if not halt it altogether.
How do you react when you debate with a socialist? Do you sometimes laugh in their face?
I had doubts based on reading history but to seriously believe that coercion works, implies so many contradictions with reality that I have to drop these doubts for the sake of sanity and intellectual consistency.
Libertyandlife:After being a socialist, it's very hard to doubt capitalism.
You are one of my favorite posters. You say a lot without talking a lot.
My biggest doubt about free markets is the interim between an occurrence and the price/wage adjustments in response to market actions (e.g. sticky wages).
But then, any government intervention, which creates further distortions, is no better, actually worse, than letting the market adjust, however long it takes. Besides, the occurrences which are the pretext for government intervention are usually caused by earlier intervention. And much of the aid the government promises to provide before long-term adjustments occur, could be provided just as well by private charity.
What's great about Austrian economics, is that it deals with the medium-term, before a hypothetical equilibrium occurs, as Roger Garrison points out, but also after the very short-term where preferences have not resulted in price adjustments to a satisfactory degree in the eyes of interventionists.
liberty student:You are one of my favorite posters. You say a lot without talking a lot.
Thanks, that means a lot. As you are one of my favorites as well. You stay consistent to ethics, reason and principles without forgetting the importance of the real world or becoming a total nihilist.
I recognize that when I debate with a socialist I tend to get a little cocky, after reading Bohm Bawerk, Rothbard and Mises, I expect that self-evident logic wins the debate but when it doesnt I wonder if there is a problem with my logic.
I mean I just debated with a guy who finally admited that people has different tastes and that utility is an important part of value but he continued to argue that there is a "concrete" value and even though people perceives utility diferently there is a "concrete" utility, later he just replied saying that "labor time is the source of value", I was disconcerted to say the least.
Clayton:As Hoppe has documented, feudalism is a lot less parasitic than modern democracy. The king could hardly tax 5% and 10% increases in taxation could unseat him from the throne. The feudal lords were frequently at war but they didn't mess with commoners for the most part because the commoners were part of the capital value of the feudal lands. All things equal, I would much rather live under a feudal system than the highly centralized democratic socialism we live under today which consumes literally half of all economic production. A medieval king could not even have dreamed of a 50% tax rate.
The tax rates are true. But there was a lot of the state meddling in peoples lives that did not consume a lot of revenue in those days. For example it was considered a crucial role of the state to enforce the state religion. Also there were a lot of regulations maintaining status, for example minute rules for what clothing people could wear (so the commoners wouldn't pretend to be nobles) and how someone of the lower classes had to react to someone of the higher classes. You could loose a limb for not greeting someone the right way. Feudalism wasn't quite as nice as you picture it. Wars would often lead to immense suffering amongst the peasants. All in all it is vastly nicer to live today, and you should be glad they "only" steal your money these days.
But you make a good point, it seems peaceful elections are not a way to empower "the people", but a way to protect the ruling class from violent reactions by the public. Democracy makes the ruling class less accountable to the public, so they can do what they feel like. In a sense absolutist monarchies were democratic, people just voted by rebelling and gutting tax collectors.
I typically do not have doubts about logic. Since I hold the action axiom as being a legitimate premise to build from I have very little doubts in the natural consequences that results, capitalism.
EmperorNero:But you make a good point, it seems peaceful elections are not a way to empower "the people", but a way to protect the ruling class from violent reactions by the public. Democracy makes the ruling class less accountable to the public, so they can do what they feel like. In a sense absolutist monarchies were democratic, people just voted by rebelling and gutting tax collectors.
Keep in mind that the whole point behind elected representatives was to protect "the people" against the legal positivism of the absolutist monarchs. Unfortunately, once the monarchs' power was checked, the representatives took up the mantle of legal positivism themselves. And here we are today.
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Nope.
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The tax rates are true. But there was a lot of the state meddling in peoples lives that did not consume a lot of revenue in those days. For example it was considered a crucial role of the state to enforce the state religion.
Religion was a two-edged sword, the it also worked on behalf of taxpayers. Charles Adams discusses the exactio inaudita or "unheard-of-tax" which was an objection rooted in religious belief to paying new taxes. Specifically, since God had set the taxes to be thus-and-so, how could it happen that there should be some new, unheard-of tax (exactio inaudita)?
Also there were a lot of regulations maintaining status, for example minute rules for what clothing people could wear (so the commoners wouldn't pretend to be nobles) and how someone of the lower classes had to react to someone of the higher classes. You could loose a limb for not greeting someone the right way. Feudalism wasn't quite as nice as you picture it. Wars would often lead to immense suffering amongst the peasants. All in all it is vastly nicer to live today, and you should be glad they "only" steal your money these days.
A lot of our improved living conditions it is just down to technological and economic progress. The upper classes are as privileged as they ever were and it's harder than ever to fabricate membership in them.
Yup. That's straight Hoppe.
Felipe: Felipe, why do you doubt capitalism? Sometimes you meet this socialist that has absolute certainty about his system, that never quits the debate, and although his arguments for the most part are weak while you write the refutation to his points you cant help but think what if the LTV has some truth to it? what if free will doesnt exist and society somehow manipulate us? Sounds silly I know.
I think free will does not exist (philosophically speaking), but that doesn't mean people do not make choices based on their preferences, genes whatever. In that sense I am compatibalist. But I know what you mean, I have such doubts too, just not about capitalism per se, but anarchism (or freedom philosophy).
(english is not my native language, sorry for grammar.)
Felipe:I admit that I've had some doubts over the years but I always remember Mises motto and it compells me to study harder to clear my doubts with logic and reason.
Given your avatar, I'm surprised you would even ask that question....
Doubt is good. Don't treat it as though its negative or bad. The fact that you can still doubt proves that you are not a dogmatist. The best thing to do when your'e doubting what you believe is not to run straight to something which will immiediatly erase your doubt however, the best thing to do is to try to fully read up on a side which supports your doubt, and then attempt to disprove it, either by your own reasoning or by more experienced minds. If you cannot disprove it however, you find that your doubt was well placed.
With that being said socialism is not a threat, its morality is childish, its economics has lost its credibility under the most favorable of conditions (one could say that what happened to marxian economics was the opposite of what happened to Austrian economics) and it has been shown exceedingly dangerous to impliment.
A much more impressive threat comes mostly from other economic schools and their various proposals for intervention.
My doubt is using the term "Capitalism".
(1) "Capitalism" was originally a word used as a pejorative for a system of society where there is a significant separation in production between the few capital owning class ruling over the many, the working class.
(2) The term "Capitalists" was used by a radical free market advocate, Thomas Hodgskin, in 1825 (this predates Marx), as a class of capital owning class using State privilege to exploit the working class.
(3) "Capitalism" is still associated by most people as this existing dominant economic system where there is two distinct classes, the capital owners, and the working class. The many working people are subordinate to the few capitalists. This dominant existing system isn't and has not been a product of a free market, but a heavily Corporatist one, but yet, many knows this system under the term "Capitalism" (pretty difficult term to promote for a popular support)
(4) The free market does not necesarrily form a society where labor is commonly subordinated under the power of capital. In fact, the workers would have more freedom to own their own means of production (small business and cooperatives). Under what is commonly known as "Capitalism" workers have limited freedom in access to credit to form their own business (i.e. worker cooperatives).
EmperorNero:Yes, I said it wrong. I meant that they earn more if they don't cheat and the cartel remains intact than if they cheat and the cartel collapses. So their rational self-interest would be to restrain themselves from cheating. I know that in reality they will cheat, but it's a thread about doubting capitalism. I just don't understand why they wouldn't figure out some way to organize the cartel.[
To be honest, I'm not even sure cartels(when formed voluntarily on the market), are necessarily even a bad thing. As RB notes in MES, their formation to coordinate production for greater efficiency could be very much analogous to the way in which firms form themselves. Furthermore, firms restricting output beyond the point where a demand curve turns inelastic would actually allow funds to be diverted to the production of goods with far more elastic demand (the existence of which necessarily follows from the inelasticity of the former good), and hence demanded to a greater degree by consumers, increasing welfare to a greater degree than it could have been.
I do need to look more into this though, I believe Pascal Salin also has some interesting work on cartels and their benefits as market structures.
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"Where there are problems there is life."