Capitalism needs to focus on the greater good

Discussion in 'Economics' started by athlonmank8, Oct 15, 2011.

  1. We can blame ourselves for this. The American form of Capitalism is over. Political bickering was a behind the scenes cause of the Great Depression. It's gonna get ugly from here on out.

    Tea Party vs Occupy

    We're going to see it again soon.

  2. The marketplace........From the shareholders, to the BODs, to the CEOs, the whole system is unsustainable.

    Sure seems like greed kills Capitalism.

    With that said, i'd take it any day of the week over any of the alternatives
  3. zdreg


    the US needs to end crony capitalism.
    it was the cause of the bubble in real estate. it resulted in the moral hazard of the too big too fail doctrine.

    when capitalists and governments are partners the result is disaster. it is not capitalism either.

    your phrase "the greater good" is achieved through the market place as each participant in their selfish interest create the greatest economic efficiency and best best allocation of scarce resources. once government gets involved beyond guaranteeing the rule of law i.e. sanctity of contract and property rights the result has and will always be disaster. the "greater good is always the justification for communism and socialism.
  4. siafx


    Agreed, but I would add that true capitalism is not about each of us looking out for our own selfish interests, but instead each of us looking out (and voting for) what we think is best for our families and communities.
  5. It is not greed that is the root cause of the current problem, it is Fraud.

    Gordon Gecko never said "Fraud is good."

    If you weren't committing the fraud that led the world over the financial precipice, the protests aren't about you (or me).
  6. it's not fraud if you can bribe enough politicians to make it legal. Well, except for the fact that it's illegal for politicians to accept bribes. I tried to bribe an honest cop once, and he told me that would be a much more serious offense than speeding.

    I never figured the whole thing out, but when I was young I thought reading books on economics would help me with my trading.

    I read a book by a college professor which stated if you really think it through on down to the deepest level, eventually capitalism will collapse.

    But like I said, I never figured the whole thing out.
  7. sheda


    Would you invest in a company that was so structurally flawed, operating from a business plan that gave them no chance of surviving the short term, never mind breaking even and going on to employ a strong work force for the long term?

    Would you invest in a company with a sound structure and a genius business plan that gave them a dam good chance of growing as a business to make a profit, enabling them to employ a work force and continue to exist?

    The "greater good" is always to simplistic and most of the time comes out of the mouths of those who believe "money grows on trees" because they come from government departments or unions and the river of capital flows to them in a different way.

    There has be to a balance between profits and jobs without one you can not have the other, yes there are corporations out there who frankly act like scum but they continue to exist because the public continues to use them, if you ask for something you get it.

    No "greater good" policy from any government or activist group is ever going to change anything for the better, or do anything more than strip away the personal freedoms there are for private wealth creation.

    You don't sound like a socialist you just sound humane, take your neighbors and friends in and crack open a funded trading account for them, have them trade with you for as long as it takes for them to become independent and of course return the original funds, its very rewarding.
  8. Nike, Reebok, China.
  9. sme


    Agree. There is a lot of blame to go around.

    Unfortunately there is a lot of misinformation (from the perpetrators/benefactors) and willful ignorance (from the believers on both political sides) out there.

    Looking at the extremes:
    100% socialism morphs into communism
    100% capitalism morphs into corporatism/crony capitalism

    Neither are desirable (both lead to authoritarianism), but we run this risk whenever people get caught up into ideologies. The risk is greatest when the social fabric of society breaks down--i.e. people don't look out for each other, don't trust each other, become apathetic/bitter.

    Current examples of widespread mentalities destructive for the social fabric:
    - There is the mentality of "I got mine, so f off",
    - There is the mentality of if some guy/some fund/some business gets duped then it is always the fault of the party getting screwed (they were dumb! buyer beware!)
    - The mentality of short terms gains at the cost of the more important long term (have to hit those numbers so the stock options package pays off! I don't care as long as the markets keep going up!)

    One thing I was taught was that in any transaction you go into, if you can't reasonably trust the other guy not to screw you all the lawyers/regulations in the world won't be able to protect you.

    Forest analogy:
    For a long time (and still), what is rewarded in "capitalism" is the clear cutting of various industries instead of sustainable harvesting. Yet we are not allowing forest fires to occur on various dead woods (zombie banks, underwater commercial RE/PE funds playing mark to model accounting, bond funds, monopolies) that need to be burned.

    I think identifying causes gets more involved b/c this has been a long time in the making.

    1st guess: I am not an expert in history, but think this started with the Reagan administration and the justified fear of communism stemming from the Cold War--this led to the opposite extreme reaction of "the all capitalism is good mentality".

    2nd: Huge skew in demographics. Baby boomers have been/are running the show--they are the elephant in the room. And naturally (by virtue of their age, stage in life, and their fortunate timing starting out post WWII) their motives/incentives are to be short term thinking. Forgot who said it but "the only one who has seen a depression is your grand father and he is dead, your father has never seen a depression". No one wants to talk about and conventional wisdom does not know how to deal with deflation. Plus technology (which is good mid/long run) adds to this deflation pressure.

    3rd: The focus on "optimizing" everything. If you look at nature/evolution, a lot of redundancy is built into things. I.e. I understand we only need one lung. Yet we have two. How many here are willing to sell one of their lungs (MBA speak: you don't need it -> monetization strategy -> sell one lung. How many here are willing to someone else's lung if it means you can hit your number to get your f-you payday?

    People who I think are a step in the right direction in talking about the problems and giving solutions (sure there are others):
    Ross Perot -
    late James Goldsmith -
    Steve Keen -
    Ron Paul
  10. zdreg


    '100% capitalism morphs into corporatism/crony capitalism"

    not true. the above happens in mixed economies because the government interferes with the free market.
    #10     Oct 16, 2011