BarkellWH -> RE: Economical Crisis in Spanish Luthiers (Jun. 19 2012 15:35:25)
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Sorry but you have a very esoteric understanding of capitalism. In fact, most critiques of capitalism that favor socialism demonstrate an "esoteric" and flawed understanding of both captialism and socialism. Most critiques begin with a basic flawed premise by comparing capitalism in practice with socialism as an ideal. That is like comparing apples and oranges. In order to be valid, capitalism and socialism must be compared either as ideal models or as they both operate in practice. There is nothing inherently wrong, bad, or perverted about capitalism as such. What is wrong are individuals and groups that manipulate the system unfairly and without principles, such as those who engaged in the totally discredited financial "derivatives" and other fraudulent practices. But that simply suggests, not that capitalism is bad or perverted, but that it needs a certain amount of regulation in various areas to ensure that everyone has a chance to enter the system and engage in valid activity. The ideal capitalist model assumes that there are no monopolies (thus, anti-trust legislation in the U.S.), that everyone has equal access to information, that the rule of law prevails and contracts are honored, and that individuals and groups are free to pursue there own economic interests. It is this model that must be compared to ideal socialism. But let's compare capitalism and socialism as they have operated in practice. By any measure, capitalism has led to greater human development. Economics has been described as the study of the allocation of scarce resources. There is little doubt that the free market and the free exchange of goods and capital is the most efficient way to allocate scarce resources. The evidence is clear. Compare the capitalist West since World War II and the communist East, and it becomes clear that free-market economics vastly outperformed the command economy five-year plans of the Soviet Union and Eastern Europe. The reason is because the millions of everyday economic decisions made by a country's population cannot be pre-ordained by a government planning cell. They are best reflected through the mechanism of the market, and production increases when people have incentives to produce. (Not that the Soviet and Eastern European "Nomenklatura" cared. I lived for two years in Bulgaria during 1974-1976, and I can assure you that these paragons of "socialist" virtue blew their "comrade" citizens off the streets as they flew by in their Zil limousines, sirens blasting to make way. Lovely demonstration of the equality of socialism.) Two recent examples are China and India. Both China during the Maoist era and India during its Soviet-style five year planning phase experienced little growth and had populations mired in poverty. China has lifted literally millions of its citizens out of poverty during the last 30 years. India has been doing the same since it dispensed with government planning and let the market predominate. Of course, there is still poverty and inequality, but more and more are being lifted out of poverty, And inequality is not bad as long as there is a path for individuals to lift themselves up, but it takes time, and not all will be lifted up equally. In the old socialist (they weren't really communist) command economies, people had no choice in where they would work, and they had no incentive to innovate. That is why there was so much stagnation in those societies. Even in the United Kingdom until the late 1970s, there was a stagnant socialist economy that was controlled by the unions. Remember "Red Arthur" Scargill and the mine-workers' union? They would go on strike at the drop of a hat and hold the British public hostage to their demands. The British economy ranked below that of Italy. And do not bring up Sweden as a practical model of socialism. Sweden was far more capitalist than Britain, with 80 percent of its economy in private hands. Sweden got the "socialist" reputation because of transfer payments through taxation. But that is not true socialism with the means of production in the hands of the government. Sweden still is a very capitalist society, but with a heavy overlay of taxation and transfer payments. But that is how the Swedes want it. That the recent financial crisis has resulted in hard times for many is regrettable, but it is not an indictment against capitalism, money, banking, private enterprise, or the free market. It simply demonstrates that within the capitalist framework, there needs to be some targeted regulation to ensure rational compliance, and that rogue traders and bankers don't go "off the reservation." And by the way, banking and credit allow innovators and entrepreneurs to obtain capital to start up businesses, which in turn create employment opportunities. Cheers, Bill
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