Friday, November 6, 2009

Capitalism flawed?

Sramana Mitra gives a well thought out reason for why she feels Capitalism is flawed. I believe she's wrong.

Capitalism works. Free markets will hold in check the greed inherent in human nature. The greed we must fight is that of politicians and regulators to have control. Free markets cannot hold that in check, and once control of free markets is gained by the government they are no longer free. Wresting control from government is only done at great cost, e.g. Fascism, Nazism, Communism, and–I have to add–well-intentioned Socialism.

When the government gets involved there are always strings attached; too many strings. The banking industry has been controlled (regulated) by government for 70-plus years. What happens in the industry happens because regulators allow it to happen; including the greed we see now. If a free-market system had been allowed to develop over the past 70 years greed would still exist, but the system would never have allowed it to get to the point we see now under government control.

Sramana says there are some systemic problems with Capitalism, but what she is looking at in the U.S. is not a Capitalistic system. Seventy years or more ago we planted a seed called socialism. At first it was small and not very noticeable. Over the years it has grown large in stature, and it's roots and branches extend into every nook and cranny of our once Capitalistic system. Capitalism is a different tree.

Is Sramana right? Or, am I right?

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palmrot said...

Dear sir, I hesitate to annonce any of you as winners, much as you seem to say much the same thing, both ardent supporters of Ayn Rand I suspect. Instead I venture that you are both exponents of a 19-20th century outlook, which 1. placed great trust in systems, and 2. was locked down in a dichotomic discourse much like the ones described here. I believe what we are seeing the beginnings of here is a global awareness that neither of the 20th century systems hold the whole solution by themselves, but that we need a litte of both. I realize you may not agree,and there is not enough space here to fully lay out the argument - suffice to say that pure laissez fairre capitalism with it's recurring crisies and enormous social costs is not compatible with the democratic system, and so the modern welfare system with a limited governental influence over the economy is probably here to stay. Maybe the kind of ideals, and ultimately, morals Mitra are looking for can not be brought about by any "system" at all? The 20th cenury person shudders at the thought, but the 21st century person may not.

Stan Wells said...

Thanks for your reply. My concern is that we have gone far beyond a "limited governmental influence" and yet recurring crises and enormous social costs continue. Didn't we learn from Communism that a "managed" system in inherently flawed because no one, no matter how bright and well intentioned can possibly keep up with a dynamic free market system?

Drama Momma said...

Personally. I am a fan of Capitalism. It works and it makes for a strong Nation. It needs to come back, we need to elect men to start removing those strings one at a time.

Stan Wells said...

I fear too many in our country now want government to do something about every social problem that comes up. I cannot understand how we have come to put so much trust in our elected officials. Most of them, regardless of party affiliation, are concerned with maintaining their position of power and control. One of the ways they do that is by giving favors, either through the tax code or other regulatory structures, to those people and businesses that support them. The proponents of government control point the finger of scorn at the greedy capitalists, but it's the government that gives those greedy capitalist their competitive advantage.