Capitalism not working?

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Capitalism not working?

Post by garymcnally » 23 Oct 2008, 09:41

"Yesterday the govenor of the bank of England said that not since the first world war has the international finance system been so close to collapse, and I agree with him" - Gordon Brown at yesterdays Prime ministers question time.

So given this statement and the US treasury's recent nationalisation of some of its leading banks (apparently the largest nationalisation in world history) along with the collapse of Icelandic financial institutions, not to mention the spiralling cost of grain internationally that has seen food riots all over the world, do you think that capitalism might finnaly be fucked? And if it isn't, then should soceity keep flogging the dead horse of free trade?

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Re: Capitalism not working?

Post by chippy » 23 Oct 2008, 10:23

Er... my understanding of free trade is that it's the flow of goods/services between or within countries, unhindered by government restrictions or interventions. That's not what we have. We have all sorts of taxes and tariffs. Am I wrong?
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Re: Capitalism not working?

Post by garymcnally » 23 Oct 2008, 10:43

Well, ok you're not wrong...what we have is neoliberalism which is much closer to Free trade than it is to say, socialism. It’s fair to say in, my opinion, that all of the problems such as the credit crunch and "real economy" economic crisis' are caused by the inherent flaws of capitalism and free trade, rather than by government intervention and TAX's.

It’s rather telling that when the economy looks to be going tits up, that governments all over the world throw away their rhetoric about the power of the market to regulate and stabilise and start immediately nationalising banks and financial institutions.

When 25,000 people a day are dying just through hunger (a figure easily set to rise given the economic crises and food crisis) despite the fact there is actually a global surplus of food created, do you not think that it is time for the world to rethink the way that it operates?
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Re: Capitalism not working?

Post by chippy » 23 Oct 2008, 10:51

I don't know enough about economics to comment on most aspects, however I do feel that to some extent capitalism is a vital driving force behind progress. Sad as it is, most technological and scientific breakthroughs are motivated by financial incentive. The majority of the population isn't altruistic enough to do things for the greater good.

That's not to say we aren't doing some things wrong though.
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Re: Capitalism not working?

Post by fotch » 23 Oct 2008, 11:32

It’s fair to say in, my opinion, that all of the problems such as the credit crunch and "real economy" economic crisis' are caused by the inherent flaws of capitalism and free trade


Any further explanation?
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Re: Capitalism not working?

Post by garymcnally » 23 Oct 2008, 11:55

I may be repeating what some of you have already read in the papers, but basically the credit crunch was caused by mortgage lenders in the USA lending to people in the "Sub Prime" market. This is essentially the market of people who usually would not get credit, but through corporate greed (one of the cornerstones of capitalism) are given credit anyway despite sometimes not even having a garunteed steady income.

This debt which is then held by the banks, is then sold on to other banks and financial institutions. So lets say I lend £50 to chippy, and he agrees to pay me back £7.50 a week for 10 weeks, giving me eventually £75. If I suddenly need that £50 and cannot wait for the 10 weeks to be over, I can't just ask chippy for it back, so I sell the debt to Idge for say, £60.

This same scenario was carried out with thousands of peoples mortgages in the US. A problem arises when people from the Sub prime market suddenly can't pay their mortgages and default on their loands. Suddenly that debt is worthless. The banks suddenly fall short on their income and stop lending money to eachother. This is a credit crunch (very creudly explained).

Just been told I have to leave the library, I'll try and finnish my explanation later...
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Re: Capitalism not working?

Post by chippy » 23 Oct 2008, 12:01

That is due to flaws in how the mortage market and banking system have been operating, but I think it unreasonable to then extrapolate that to fundamental flaws with capitalism.
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Re: Capitalism not working?

Post by fotch » 23 Oct 2008, 12:06

chippy wrote:That is due to flaws in how the mortage market and banking system have been operating, but I think it unreasonable to then extrapolate that to fundamental flaws with capitalism.


This.

It's like saying that because someone drives badly and crashes a car, the car needs to be redesigned rather than the chump driving it. They should have been more careful with who they lent their money to, end of story. You're never going to take greed out of human nature Mr McNally.
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Re: Capitalism not working?

Post by chippy » 23 Oct 2008, 12:15

Yeah, I was gonna say it's like blaming the music industry for Gary Glitter touching children. Which doesn't work quite as well admittedly.
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Re: Capitalism not working?

Post by metal_dave » 23 Oct 2008, 13:15

finally those capitalist pigs will pay for their crimes, eh comrades?
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Re: Capitalism not working?

Post by campy » 23 Oct 2008, 15:24

Ah capitalism; the wonderful system where the advancement of mankind is driven by the want for money. The theory is pretty sound, but unfortunately when greed is the driving factor behind pretty much everything then the negativity of avarice will surely shine through.

I doubt that the current financial situation will be the death of capitalism, maybe the slow decline of the West though. The whole nationalisation of the US banks is slightly worrying, I wonder if they'll live up to the promises of it being only temporary? As for free trade, I think complete freedom is baaad, we need regulation and lots of it. We just need someone who actually has more than a few brain cells to knock together to put it together.

On a related note, isn't it fun seeing lots of £200 haircut sporting, stripey shirt wearing blackberry addicts looking really miserable.
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Re: Capitalism not working?

Post by SquidgyB » 23 Oct 2008, 15:38

So if you boil it all down and trace the reasons back, we're essentially paying more for all kinds of goods to cushion the blow to banks and lenders who fucked up royally, and gave credit to people who blatantly couldn't afford it.

I love the world we live in. I really do.

Oh, and the capitalist pigs will not suffer, I suspect most of the banks and lenders involved will come out relatively unscathed. It's the general public, in particular the people who are already hard up that will be paying the price.

*sigh*

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Re: Capitalism not working?

Post by Lord_Blacknose » 23 Oct 2008, 17:08

The problem wasn't really capitalism so I don't think it's going away any time soon. The real problem is greed, corruption and cronyism. Sadly I can't see those going anywhere either though.
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Re: Capitalism not working?

Post by garymcnally » 24 Oct 2008, 10:32

There are other problems with capitalism that cause HUGE fucking problems for the rest of us.

Eg. The Crisis of over production. If me and Chippy were both mega rich capitalists deciding on our next venture and we notice that Metal Dave is making an absolute killing from making fluffy pink dice for car windscreen mirrors and that Metal Dave wasn't nearly filling the industry demand for fluffy pink dice, then we would jump right in there, open up our own production line of little fluffy pink dice.

Suddenly with Metal Dave, Chippy and I all owning our own individual factories making pink fluffy dice, there is suddenly a HUGE surplus of pink fluffy dice. Metal Dave has sold most of his before Chippy and I go started, so he is safe, Chippy managed to sell most of the pink fluffy dice that he made, has recouped all of the capital that he invested in getting his pink fluffy dice company off of the ground, and has created a nice little profit.

Unfortunately I havn't managed to sell all of my dice, I try dropping the price of my dice, I try buy one get one free, but there are just too many god dam fucking fluffy dice on the market! I'm screwed!

Mcnally's fluffy dice inc. goes under and I am forced to lay off all of my workers. So Faye and baby Draco (as a capitalist I have no qualms about child labour) suddenly have no wages, they stop buying cakes from Chippy's cake shop (did I not mention Chippy bought out Mr Kipling?). So suddenly Chippy's cake shop revenues take a hit, so he has to cut wages and eventually lay some staff off, who then can't buy stuff from Metal Dave's bondage imporium...

This continues until you get economic stagnation, then a slump, then a full on recession. It has happened time and time again and will keep on happening over and over again, and will get worse until capitalism is replaced with a more humane epoch.

When you have a system that is based entirely on individuals concerns, one capitalist fighting against another, then you will get these economic crisis'.

Also, whilst Chippy Metal Dave and I where busy making fluffy pink dice for car windscreen mirrors, 50,000 pensioners froze to death in the UK because nobody was providing cheap insulation and the gas prices had shot up beyond inflation.

Surely a system where instead of one capitalist fighting against another capitalist and exploiting us all for their own selfish needs, we should have a system that is planned by the majority FOR the majority?...

Someone mentioned human nature ealier, when I've got over this flu-type bug I'll tackle that one.
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Re: Capitalism not working?

Post by fotch » 24 Oct 2008, 10:39

as a capitalist I have no qualms about child labour


woaah there Mr Broad fucking generalisation.
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Re: Capitalism not working?

Post by chippy » 24 Oct 2008, 11:01

fotch wrote:
as a capitalist I have no qualms about child labour


woaah there Mr Broad fucking generalisation.


Absolutely. Gary, wild conjecture like that totally undermines your credibility. I have my own limited company, through which I provide testing services as a consultant to T-Mobile. I use the company structure to maximise my income from my contracts via shareholder dividends etc. I'm also planning to develop a side-line in building high-end gaming PCs to sell, possibly employing a couple of people to do the labour. This is, to all intents and purposes, capitalist activity. It doesn't mean I'd use child labour though, that's just idiotic. I think you'll find the majority of major corporate organisations don't either. A lot of them also put a lot of money into communities, developing the third world, reducing their carbon output, etc. etc. To constantly equate capitalism, which is essentially just a load of economic principles, with evil, is just silly. VERY fucking silly indeed.

Also, your example's retarded. Entering an already cornered market is a fucking stupid basis for a company. A company wouldn't exist solely to sell fluffy dice and would have a whole range of products. This is why you're not running a business.

What would your "planned for the majority by the majority" solution be? Everyone gets together round a big table and has a nice chat about how to ensure that all the fluffy dice, cakes and bondage equipment get fairly distributed among society? I think society has got better things to waste their time worrying about. On top of that, how exactly does the majority plan for the majority? Ever tried to get 10 people to agree on something? How about 60 million?

Your basic argument there appears to be "capitalism's bad because the company might fuck up and you'd lose your job." What's the alternative? State funded benefits for all? Oh hang on, that's what happens when you lose your job isn't it... :doh:
Last edited by chippy on 24 Oct 2008, 11:24, edited 1 time in total.
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Re: Capitalism not working?

Post by Lord_Blacknose » 24 Oct 2008, 11:21

Look at Mr capitalist getting offended.


I do agree though, and Gary's post had nothing whatsoever to do with the current economic problems.
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Re: Capitalism not working?

Post by LittleTill » 24 Oct 2008, 12:13

chippy wrote:It doesn't mean I'd use child labour though, that's just idiotic.



what if their little hands build the best gaming pc's?
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Re: Capitalism not working?

Post by chippy » 24 Oct 2008, 12:19

i'll pay them with sex
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Re: Capitalism not working?

Post by garymcnally » 24 Oct 2008, 12:22

The child labour comment was a bit of satire. The example I gave wasn't supposed to be an in depth reflection of how capitalism works with real examples, that would take hours to prepare and all of my textbooks and journals are in storage 20 miles away. It was supposed to be a light hearted attempt to try and explain some of the internal problems with capitalism.

Also I don't think I ever actually said that capitalism is evil. It has done a fantastic job of dragging the world out of feudal systems and has now given us the technological capabilities to provide for us all...but it doesn't! It needs to be got rid of, just as fuedal society needed to. It is no longer leading us forward, but holding us back.

As for what Chippy said "Also, your example's retarded. Entering an already cornered market is a fucking stupid basis for a company." The market wasn't cornered, there was still room for more fluffy dice to be made, but the problem is EVERYONE tried to be the first to fill that market, it then becomes over saturated. And I agree doing that is stupid, which is why PLANNING needs to be introduced to the commodity production cycle, not just loads of capitalists fighting eachother for the scraps of the market.

Also, Joe if you look at my post I do say "There are other problems with capitalism that cause HUGE fucking problems for the rest of us." But if you look at the argument I put forward you can see how workers getting paycuts or laid off (like what is happenning in the current crisis) is only going to make the problem worse.

I never intended for my posts to offend anyone. I don't think that anyone is evil for entering into capitalist enterprises...that would be fucking stupid and I never said anything like that! As I've already stated, the child labour comment was a JOKE...but do remember that 218 million children are in forced labour.
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Re: Capitalism not working?

Post by Lord_Blacknose » 24 Oct 2008, 12:30

I'm hardly about to defend the current form of capitalism we use myself, but your post didn't really do you any favours is all.
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Re: Capitalism not working?

Post by garymcnally » 24 Oct 2008, 12:40

I can't really see why my post has caused such a stir in peoples emotions :-|
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Re: Capitalism not working?

Post by chippy » 24 Oct 2008, 12:40

It hasn't stirred mine, that's just how I debate things.
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Re: Capitalism not working?

Post by chippy » 24 Oct 2008, 12:44

I'd like to hear a rough outline of how society could work without capitalism, as I'm genuinely interested. I just can't foresee a practical alternative myself.
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Re: Capitalism not working?

Post by chippy » 24 Oct 2008, 12:56

garymcnally wrote:I can't really see why my post has caused such a stir in peoples emotions :-|


Actually, thinking about it, I'm sorry I adopted such an agressive tone Gary.
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Re: Capitalism not working?

Post by metal_dave » 24 Oct 2008, 13:17

for the record, i'd make them all different colours anyway, so i win.



seriously though, i'd like to see some stinking rich people lose vast amounts of money. nobody needs a billion pounds.
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Re: Capitalism not working?

Post by fotch » 24 Oct 2008, 14:16

chippy wrote:
garymcnally wrote:I can't really see why my post has caused such a stir in peoples emotions :-|


Actually, thinking about it, I'm sorry I adopted such an agressive tone Gary.


You won't be saying that when he's seeking you out at the head of a baying mob of proles, aiming to bring about his New World Order.
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Re: Capitalism not working?

Post by chippy » 24 Oct 2008, 14:19

i shall simply release the hounds.
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Re: Capitalism not working?

Post by garymcnally » 24 Oct 2008, 15:58

No problem Chippy, took me back a bit is all.

I think Fotch is making some comedic guesses at my political leanings.

The kind of society that I think we should be fighting for is one where all the major important decisions are made by the people. For example, should we build more tanks and bomber jets or build more schools and hospitals for our sick? Should we make thousands of fluffy dice for the front windscreen mirrors in our cars, or should we invest in clean comfortable and spacious public transportation? At the moment these decisions are made for us by the rich based on what will make a profit, I think that they should be based on what we actually NEED and that these decisions should be made democratically.

How this is actually organised is touched upon in State & Revolution by Lenin (awaits the hurling of abuse along the lines of "fucking commie"). After the 1917 Russian Revolution workers soviets (councils) where set up and the people of Russia finally started making these decisions for themselves. The USSR was the first country in the history of the world to pull out of a war just because it refused to fight anymore! It was also one of the first country's (if not THE first, im not sure) to offer divorce and abortion on demand. This is the kind of society that I think we should be considering internationally...
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