Business Economics

[Kashluk]

Uh, I think I'd try to start some sort of a debate or a discussion... Or to get some kind of an answer to my question. I added the poll just to keep you happy. Yes, I know it doesn't have much to do with the subject as it's about economy in general and the voting options are about completely different things - but onwards! To the subject:


Being here at the Capitalist School has made me thinking. In true free market no single enterprise or customer can effect the markets alone, nothing should limit the market's freedom and anything concerning production, distribution and all between those two shouldn't be regulated.

Yet in free market enviroment every enterprise thrives to gain a monopoly. In monopoly the enterprise gains at the expense of the consumer and rivaling enterprises and this is real bad for free market, because once a monopoly is born in the market it soon leads to the decaying of the whole market causing either A) a stagnant situation, where the owner of the monopoly gains enormous profits and dulls the market or a giant economical breakdown in that specific sector.

So free market is an economical system that's main principle is to not regulate it, but to keep it from collapsing it must be regulated? So is free market thinking (at it's purest) just a bubble with no real life chances of survival? This has been bothering me for a quite some while now, because even countries with policies very close to the true principles of free market economy are supporting things like minimum wages, tariffs and monopoly laws.

And another flaw of free market seems to be it's swinging (which is both it's weakest and strongest point, as it moves faster than any other) from one direction to another, especially the negative effects of such. Of course there are "safe nets" to overcome this, but considering that things like currency/exchange reserves are created on expense of the free market itself, what's the point? Not to mention that the strength of a major market crash or growth boom can easily roll out of these so called "safe nets", because supporting stable economy in a wild west enviroment such as the free market costs too much to keep the free market itself alive?

Discuss, no?

[Trakocian]

I tend to think of the free market as a kind of living entity. Constantly changing, evolving, advancing, rethinking. Without cooperation the market will not exist. However, without standards and accepted modes of operations, the market will not work either. This is where the regulation comes in.
This regulation must be to support the market however. It must be in good conscience AND practice to help/benefit the market. If the regulations do not benefit in practice, it doesn't matter if they were created in conscience.
The same applies for a Monoply. It may have been created out of the market, but it no longer benefits the market.
The Human body itself requires cooperation from its systems and organs to survive and grow. If one group seeks to benefit at the expense of others, the system will break down. That's called cancer. In some cases, the body dies. The cancer goes with it. But markets can be reborn.
Just remember the story of the tower of Babel. A group of people wanted to build a tower greater than God. God scrambeled the people's tongues and the project was abandoned. They could of stuck with it, but the project was no longer worthwhile.
As for market swings, nature does the same thing. Animal populations are constantly fluctuating. Markets rise and fall and always will. We want that. If a market was consistent, it would be in a rut and would never grow, even if that rut was a positive growth rut. Anything in a rut will be most certainly taken over by something faster, new and improved.

[Kashluk]

Well, the trouble is that because markets are a "living entity" as you said, we the people are only smal little objects in it's way. That's why we try to lighten it's swings to protect ourselves (from bankrupts, monopolies...) and while protecting ourselves we're hurting the free market. These protectional systems do not benefit the *system*, they benefit *us*. But they're pretty important to keep our economies protected from things such as economic depression, mass unemployment and other negative effects of rapidly and heavily moving markets.

My point is, that has the whole free market idea become obsolete if we're nevertheless going to adabt tools of socialism in it (hammers and sickels, woot)? All those social measures I mentioned before lean more towards planned rather than free economy.

[Walks with the Snails]

I agree that there isn't a truly free market today and there probably will never be one. People who think we really have a free market should probably take a closer look at how cozy certain corporations and the government are, and think through the implications of all the piles of legislation that pour out every year.

Problem is, I think planned economies are doomed from the start because they're by definition a top-down approach. You'll never have a perfectly knowledgable, perfectly informed, perfectly moral, and supremely powerful authority to run it, which is what it would take to really work. Authority figures are always going to make mistakes, and there are always going to be underlings who know better than them but are forced to go along. Market-based systems have the advantage of putting the decisions in the hands of everyone, so the power and responsibility is more distrubuted. Of course they need a perfectly informed consumer to work best, which doesn't happen, but at least there's less opportunity for abuse.

What kind of bugs me about capitalism is that many people take it as a license for immoral behavior. "Hey, it's only business." I don't know quite where the idea arose, but it's pretty common. Yeah, you're expected to compete, but why should that necessarily mean anything goes? I think capitalism's core weakness is that it tends to draw on our worst instincts, rather than our best ones. That's what lots of people think is great about it, but really there has to be a better way. I'm afraid it has a corrosive effect on people who get too caught up in it. Just because something works doesn't mean that's the only way. Legalized rape would be a dandy way to increase the population in developed countries that have shrinking populations, but couldn't you sit down and figure out a better approach? So I vote other. I'll be damned if I know what it is, though.

[Kashluk]

Yes, you are very correct about the socialism's weak point - funny thing is, that this same "weak" point in our so called free market keeps the system running

And the last paragraph is very true as well. As for what that other-option could be, well how about barter / natural economy? I know this would mean mankind's regression, but in completely small-scale economical means bartering would be the most efficient way of handling things, no? Maybe evolve bartering into something else than ordinary capitalism / socialism? Something in between or completely out of their league?

Most often the simpliest way of overcoming a problem is the best one.

[Walks with the Snails]

Bartering is still capitalism, just less convenient. If a bushel of wheat is worth a gallon of milk, then both should be equal to the same amount of hard currency, say a dollar. Whether or not you use abstract currency to effectively make the same transaction (my wheat for your milk) is irrelevant. If Farmer Joe trades his wheat for Farmer Mike's milk, it's really no different than if Farmer Joe sells his wheat to Trader Bob for a dollar, then uses the dollar to pay Farmer Mike for the milk. All money does is simplify things, so you don't have to load up your truck with a bunch of junk to trade and find someone who has what you want and that you have what they want, you just sell what you want to sell, keep the money, and then buy what you want with it.

[Kashluk]

Well... I guess that's right. But with natural economy I was referring more towards the point where people would produce most of the goods they needed by themselves and bartered for the rest. The movement of products would be reduced and the whole meaning and value of trade would be minimized. It's a far shot and it might've worked 3000 years ago, but that's all my imagination can come up with

The problem seems to be how to create a system where everyone gets what they need and everyone gives what they can and it still wasn't just some Marxist wet dream.

[SuperH]

The problem seems to be how to create a system where everyone gets what they need and everyone gives what they can and it still wasn't just some Marxist wet dream.

Yeah, and the biggest problem is the fact that it ends up being utterly impossible, because :

Fig A.
Amount people need - X

Fig B.
Amount people can give - Y

Fig C.
Amount people are willing to give - Z

Of course Z is going to be greater than X in any given scenario, that's just greed, but the facts are that Y is also going to be greater than X if you want to have a decent standard of living.

What are the only two situations where the amount people need is exactly equal to or greater than the amount that's given to them?

The situation of taking away from others to give yourself what you need at their expense, and the situation of self sufficiency.

If you want some people to to get all their needs, you need to either have a few people who aren't getting their needs so that some other people can, or you lower the standard of living to the point that what people produce is equal to what people need.

Huzzah, unfortunately this current society's needs outweigh the amount it produces.

[Kashluk]

Thank you, Mr. Obvious

I'm fairly sure we all know why it doesn't work. I was merely using that phrase from the Communist Manifesto to picture the goal, be it distant and impossible or not. I was asking for the measures in which way to achieve or at least get as close as possible to this goal.

Socialism doesn't work efficiently. Capitalism doesn't work efficiently. Low-level natural economy keeps us from advancing both technologically and socially. Mankind has been in all of these, so what will be the next step - if there is one?

[jetbaby]

ANARCHIE MAN! BRING DONW TEH MAN! DONT LISTEN TO POPULAR MUSIC! LISTEN TO MARYLIN MANSON!!! HE SPEAKS TO MY SOUL!??


Seriously though. This is a good, serious debate. Keep it up. I'm sticking it out, just wanted to offer my encouragement to quite possibly the first discussion I've seen in a long time without someone flaming someone else.

[Trakocian]

FFFFFFFFFFLLLLLLLLLLLLAAAAAAAAAAAMMMMMMMMMMMEEEEEEEEEE!!!!!!

[Walks with the Snails]

Huzzah, unfortunately this current society's needs outweigh the amount it produces.

I think you're confusing need with want. We've got plenty, really, by any reasonable standard of measure. One solution isn't to produce more, it's to want less. I've been experimenting with the idea, and really it's not so bad. There are lots of ways to have fun without spending much money. Maybe when I'm older I'll start worrying more about that healthcare and supporting kids stuff, but it works pretty well now.

Socialism doesn't work efficiently. Capitalism doesn't work efficiently. Low-level natural economy keeps us from advancing both technologically and socially. Mankind has been in all of these, so what will be the next step - if there is one?

Personally, I'm betting on robotics and nanotech. It's really pretty easy for most people to be generous when it doesn't really require any effort from them. Try The Diamond Age by Stephenson some time. The production of basic necessities was sufficiently automated that everyone's basic needs (food, shelter, medicine) were taken care of by automated public nanotech assemblers, so people were free to just do what they wanted. There was still an economy for people who cared about having stuff that was still actually scarce, like hand-made crafts, but if you weren't interested in that, you could pretty much do what ever you wanted.

[Kashluk]

Damn! That sounds brilliant. I guess all we have to do now is to achieve this level of "robots taking care of the crappy jobs". Throw a guess, how long would it take with current progression? 20, 50, 100 or 500 years?

But pushing sarcasm and shit aside, this sounds quite good. As long as we don't get involved with the creations of human-level AIs. I've seen enough science fiction movies where humanity gets fucked in the ass by thinking computers Anyhow, that belongs to a different discussion, back to economics.

Your bet sounds a bit like Hegel's evolutionary optimism: "If we keep advancing, we can't go wrong." Robots, cyporgs etc. can only take care of the production / physical labor. The actual research on more efficient power sources, nanotechnics and new assembly line designs are left to man, the man of our time. If we would take this kind of an enviroment and society as our primary goal, how much time, effort and resources would it take to become reality? Enough to cripple world economy, maybe?

[Thor Kaufman]

Yeah, let robots do all the work, so we can lay down at the beach doing nothing

Sounds good to me and the wackos who think they need work to be happy can serve the drinks

[Walks with the Snails]

Your bet sounds a bit like Hegel's evolutionary optimism: "If we keep advancing, we can't go wrong."

Yeah, I guess so. I think people overreacted a bit when the atomic bomb was invented. Yeah, we'd probably be better off without them, but look how much better technology has made our lives beyond that in the same time period.

If we would take this kind of an enviroment and society as our primary goal, how much time, effort and resources would it take to become reality? Enough to cripple world economy, maybe?

Well, I doubt we'll ever get society to gear itself towards this, but it's most likely going to happen anyway. I figure in 50-100 years. And out of the present economy, too. Someone will sell you robotic housekeepers, then cheap, efficient means of producing your own power, and on and on. Eventually it will dawn on people that they're able to live the good life without too much extra effort. And then they will. They no longer need to work 60 hour weeks to provide for their "basic needs". Once the idea gets more established, then we'll probably see a more collectivist approach, with more public facilities that give out "free stuff". Then the kids who grew up in this environment will probably think a lot of our "economics" is quite a quaint and outdated concept, and they'll go ahead and finish the job once their turn at the helm comes up.

[Kashluk]

Well, that makes sense. Too much in fact, because I don't think there's much left to discuss about the subject after this "all-covering" theory. Oh well, at least this topic served it's purpose.

I guess we'll stick to our current system for now, as it seems to bring most fruitful results, ignoring the negative effects?

[CloudNineGT]

Utopian sounding, somewhat. However, any society that leaves no work for its citizens is going to stagnate. From such a veritable decay of effort there will always be the exception, and some as outlined above will still seek to consume. In fact, its arguable that to consume is the most base desire of all humans, nay, all creatures. To leave someone with no responsibilities, even to themselves, is to leave a breeding ground for unrest. When a majority has no reason to work, leisure becomes primary, and then a chore. You get a compounding lazy population that produces nothing. Innovation is the child of discontent, remove that and you have dormancy. Not a good thing for society.

[Kashluk]

Well there's always left the "ascencion to Heavens" and shit. Maybe psychology, philosophy and science in general will begin to flourish after more people are left with time to do research that doesn't need to have anything to do with practical executions.

[CloudNineGT]

An actually intellectual populace. If it actually happened, I would love it. In any case, psychology has always had immediate applications, it is after all the study of the mind. Philosophy will always blossom when there is someone willing to listen, and someone with a big enough ego to talk. The part that would worry me is sciences. Often time innovations in this extremely vast field are exceedingly expensive, and though there will always be minds that seek to understand their surroundings better, or improve upon them, they will always also be in minority. Grants from another party who sees profit in the scientific venture are what allows this research to continue, but withought the necessity of a greater income I feel that many would cease to fund such operations. A society driven by personal gain may not be in any way ideal sounding, but it is the most productive.

[Walks with the Snails]

Productive at what? Personally, when I look at most "productive" people, I think that they're mostly wasting their lives. What exactly is the stereotypical surburbanite dad, who churns away 60-80 hours a week, supervising people who make it their goal in life to sell people stuff they don't need, so they can all make their commissions and keep up the payments on their SUV's and McMansions, contributing to the world at large? Not a whole hell of a lot if you ask me. If they just sat on their asses all day, the net loss to the world at large wouldn't be a whole hell of a lot, at least to me. In this ideal world, I would imagine people with the right stuff would still work on interesting things. In fact, they might even be better able to, if the resources were sufficiently plentiful. What resources would they need that a robot couldn't dig up or an assembler couldn't whip together? No more of those Ph.D.'s you read about working at Starbucks or driving an 18-wheeler to put food on the table.

I think you're right that people will eventually get bored with indolence. Hell, it even happened to me, and overall I'm a pretty lazy bastard. When they get the drive to actually do something, though, wouldn't it be better to let them have the freedom to follow their own interests rather than be forced to put in untold hours at a meaningless job for a paycheck?