Mind Over MoneyFollow

Based on the title and that it's being produced on PBS, I'm going to go out on a limb and guess that their answer wont include "Because a cushy relationship between politicians and Fannie/Freddie resulted in the investors being lied to about the value of mortgage securities while the government provided cover

Yes, I'd say it's safe to say that it won't include an imaginary rationalization sold to childlike followers of a "free market philosophy" which they aren't capable of understanding.

Also, it's highly unlikely to include the salient point that capitalism, is, structurally, a system guaranteed, indeed, designed to periodically fail on a grand scale and that most of the last 150 years of modern economics has been spent trying to understand how to overcome this fundamental flaw.

And even less likely to observe that despite this apparent weakness, capitalism is still by far the most efficient improver of average standard of living for those using it than any other economic system yet dreamed up.

Not true. Well, let me qualify that: Not true by any agreed upon definition of "standard of living". By your imaginary, every changing, fluid as you being to lose arguments definition, who can say? What capitalism *is* good at is destroying competing systems. This doesn't make it superior to those systems, it simply makes it more effective at destroying them.

A babysitter who excels at killing all other babysitters isn't necessarily the most likely to provide the best child care.

Lol! The communists standard of living is binary Smash. That's your problem. You list things that you believe are "necessary", and then check them off a list. Economic systems which provide the most number of those things to the most people are "best", and those which provide fewer are "worse".

I did not say that capitalism was the best economic system at ensuring that as many people as possible obtain some minimum amount of necessities Smash. I said that it is the most efficient improver of "average standard of living". Your problem is that you refuse to count any quality of life past the minimums you've set when calculating said "average".


How convenient for you that you can find bunches of other liberals who'll "agree upon" your definition of standard of living. For those of us who think that things like air conditioning, internet access, cars, travel, and numerous niceties in life should count when calculating an "average", your method stinks. It also ensures that most people will never get more than the minimum you want to provide them with. Which makes it not only crappy, but self defeating as well.


You can define "prosperity" as low as you want Smash. Some of us don't agree with that at all.




That's an odd way of looking at it. Capitalism is the system people will choose unless they are forced by some authoritarian mechanism to use something else. If that means it's good at "destroying competing systems", it's not because of some nefarious aspect of capitalism, but because it's "better" than those other systems. That's like saying that a telephone is good at destroying the competitiveness of two tin cans connected by a string in the area of telecommunications. Well, yes. But there's nothing wrong with that.

I'm always amused when those who love Darwinian concepts when it's useful for attacking Religion consistently fight against those same principles when it's inconvenient for their own pet political or economic ideology. If you have to use massive amounts of government rules to force the people to adopt a given economic system, it really ought to dawn on you at some point that maybe what you're doing isn't really the best thing to do. That would require a bit of common sense though, and why use that when you've got a bunch of educated people all telling you that they know what's best?

Lol!



A babysitter who gets more business because those she babysits for choose to employ her more than the others does suggest that she is providing the best child care. What you're doing is trying to change some legal definition of "child care", so that the other babysitters will get more business. That's kinda dumb, isn't it?

It was a reasonable extrapolation of what you meant based on your years of posting on this forum. Was I wrong?



Odd that you failed to do this when you made your previous post and used the phrase yourself.

I'm using it in the fairly obvious way: A summation of all the things that affect your life economically. This includes both quantity and quality of goods and services to which you have access. So yes. Owning a high definition TV improves your "standard of living".

As I stated in my earlier post, I suspect that your definition includes meeting certain minimums you deem to be "necessary". Which is a relatively arbitrary standard, but is the only one in which someone could actually claim that capitalism fails to out perform every other economic system. Which is presumably precisely why you use that definition.

If you believe that's not your definition, then how about providing one and then showing how capitalism fails to be the "best increaser of average standard of living" of all economic systems. To do that, you'd need to explain how we'd have moved from horse covered wagons to high performance sports cars in a century using some other economic system. I'd *love* to see you try to explain that one...



"Stunningly bad" is a relative term though, isn't it? Are other systems better? Shall we contrast the economic outcomes between say the US and the USSR between 1920 and 1980? People do make poor choices. But they don't make them any less often if they are in charge of making decisions for a large number of people, or a small number.

The inherent advantage of capitalism is that poor decisions cause poor results for those who choose them, providing a pretty direct feedback mechanism. All other systems cause poor results for the people who are subjects of those making the poor decisions, and takes away their ability to make different choices. Shall we take a look at how many Chinese died of starvation while Mao continued with economic policies which didn't work year after year?

Free markets are not perfect. But they are the best out of all possible choices. That's not to say that governments can't and perhaps shouldn't regulate some aspects of those markets, but when the government attempts to pick winners and losers, and attempts to set prices and ensure specific results, it usually ends out making things worse, not better. History shows us tons of examples of this, many of which vastly out-bad the worst results capitalism can cause.



Now you're just making stuff up. I'm not even sure what you think you're talking about here. Capitalists seek to engage in free trade with others, but the extent to which the others are "compartmentalized" or "destroyed" is only to the extent that they continue to use less efficient economic methodologies. The reality is that capitalism is so much better that those who insist on using other systems fall behind economically. I suppose you can call that destruction, but it's like the phone destroying the tin cans. One is just better than the other in every single way.



I think you're mixing some other political issues as well. If we're looking just as capitalism though, it's not that capitalism is "limited" to those practicing capitalism, but that those who practice capitalism reap the rewards. And those rewards are so great that those who don't appear to be "punished" in comparison.

It's not a failing of capitalism that it's so much superior to every other system that those other systems collapse if they don't adopt capitalism in order to keep up, and it's funny that you seem to view this that way. No one forces other nations or people to adopt capitalism. They adopt it because they look at the nations which have and see prosperity (and standard of living) so far beyond what they have that they demand it. And it's only when their governments, in some apparent attempt to retain authoritarian power, take draconian steps to prevent its adoption.

And yeah, the people living in those countries suffer. But the process isn't quite what you're trying to imply.

Ah. Semantic confusion. I mean "people" as in "individuals acting independently". You mean "people" as in "group acting uniformly". Completely changes the meaning.



You don't? You have a weak grasp of history if you don't get that people can vote for authoritarian systems, sometimes with disastrous results. Your own statement supports my assertion. People don't have to vote to pass laws to use capitalism as an economic system. They simply each choose on their own to use it. The people have to be talked into voting to give government the power to enforce other economic systems (or not have the right to vote in the first place).

That should be your first clue that one is "natural" and the other requires government intervention. How or why that intervention occurs is not the point. When "the people" vote in a law which mandates that everyone must buy health care or pay a fine, the majority may have supported it (although they didn't in this case, but we can ignore that), but the individuals affected would not choose to do so on their own. This is somewhat axiomatic in that if they would have chosen to buy health care on their own we wouldn't have needed to pass a law.

Don't get caught up in assuming that a democratic system of government changes the nature of the authority the government wields over the citizens that are governed.



Oops! Too late. You made that assumption, didn't you?

People can vote to give government authoritarian power over them. Insisting that because "we voted" it somehow changes the fact that this is increased government authority is a silly distinction.



Yes. See my statement earlier about people voting for things which hurt them in the long run.



No. They wont. Never in the history of the world have complex rules imposed on economic systems made them more stable. Ever. They always produce new problems, usually escalating in severity until things are worse than they were when you started. This happened in the 30s with the Great Depression. It happened again in the 70s to a lesser degree. Interestingly enough, despite all the hoopla made about failures in free market systems run amok, the damage, severity, and duration of relatively free market crashes are minimal in comparison to those made by well meaning governments trying to prevent or minimize some economic harm they perceive.


All the things the government is doing right now to "fix" the economy and improve things for us all will have negative impacts on the economy as a whole. We can't predict exactly what they will be, but it's pretty obvious they will occur. The obvious is the massive debt we're racking up, which will have to be paid. What is less obvious is the reaction of markets as a response to the health care legislation, and the various stimulus bills, and to the financial reform bill if it passes. This is because when government changes the rules, the players change how they play. And it's nearly impossible for those in the government, no matter how smart they think they are, to predict all of the possible reactions which might result from their actions, much less be able to get "good" choices through the legislative processes.




Did you read the link?



You're also failing to see that the tables list different values. That's not GDP loss, it's "business activity". You can't just compare those numbers directly. Also, if we look at that list, what we see is that the pattern of recessions coincides with government activities. And if you really pay attention, you'll see that in many cases, several "close" recessions are really part of a longer pattern of government action, reaction, reaction to that reaction, etc...


Look. I'm not some raving libertarian on this. I tend to support modest fiscal and financial regulation and controls. I don't have a problem with the Fed and I agree that their work adjusting rates tends to smooth things out. Those are not the issues at hand though, and they historically have had minor effects (both positive and negative as you can see from the list). The larger effects are driven by government spending and taxing. Those create ripples in our economy. Social spending, and regulation designed not to prevent economic problems, but rather to support some other political agenda also tend to have negative effects. So health care, energy policy, housing policy, immigration policy, and many many others all have an impact on our economy.


It's not so much about government modifying rates (and that's technically the Fed anyway). It's about government passing laws and regulations which mandate what products must be bought and sold, and for how much, that cause massive economic problems. That's the point at which it ceases to be a free market, and becomes some combination of socialism and communism. And those systems simply do not have the same objectives as capitalism does. And IMO, their objectives are not good ones.

Edited, Apr 29th 2010 7:13pm by gbaji