Capitalism isn't working! Has time proved that it never can!

General Discussion
21

Sorry Brian, will save the vid for the weekend, am too busy right now being a capitalistic landowner in the midst of the wine harvest ;-)

But in a quickie, over a well-earned hot espresso: maybe the French governments have build up what we see today. But largely financed by taxing the gains of the capitalist system. Now that the appetite has grown too big they have turned more and more to the lending on the int'l markets and have become vulnerable or dependent to the mood-swings, ratings etc. of the financial markets. A bit like the individual people who don't have enough money to buy what their heart desires and turn towards a bank for yet another loan...

Worked in another life for a Japanese multinational as HR-Director. This company was firmly rooted into the Japanese society and practiced already for years what is now known as "Responsible Entrepreneurship". Profit is necessary to sustain the company but is not maximized beyond the needs (including some reward for the stockholders) as the employee, clients and the society are seen as stake-holders too. It's a milder form of capitalism, yet very competitive and agile on their markets.

What always strikes me is the difference between companies that produce a tangible product, that create something and those who don't. Maybe I'm wrong, but I feel that you'll find more-often the latter creating their own world, their own rules. The disconnection between the real world and their own becomes very visible when things go pear-shaped, when they demonstrate a profound incapability to change the way they operate. Guess the banking-world is one good, sometimes infuriating example.

22

There's actually a considerable number of things on there, the Chinese academic's presentation is, for instance, superb and clarifies a lot. I also made the point that none of it is apocalyptic (for a change) but clarifies, so that it does vary from the prophet of doom line but that we have a lot to really look at closely and thus Aftermath is quite an appropriate name for the project because the peak of the crisis has past (for now at least).

All French parties/governments since WW2 have built up to what we see today. Hollande has just surprised me in his review of education today with a positive step, so perhaps there is something good coming from this lot. I am not placing a bet yet though. If I am a dreamer, then I was educated to be that by some of the finest minds in their fields and in their time, all of whom are gone. Utopia is far from ever in my mind but small steps, one at a time for greater social justice and a positive future for the world is all I think are realistic and should be the goal of everybody, whatever their ideology or personal culture.

23

Just had a look at the video, although I didn't watch the whole thing (60 minutes?).

A couple of things jumped out at me in the first 10 minutes or so.

Firstly I couldn't see anything at all apocalyptic about it at all, and secondly there was a completely standard capitalistic marketing system being laid out - only the names were being changed.

There was Product, Price, Place (distribution) and Promotion (word of mouth is still Promotion) and at the end of the day some Profit for distribution and further investment. All standard stuff.

The group involved had individual aspects to attend to, and collective decision making is what most Boards of Directors are all about.

The fact that what I saw was all based on agriculture doesn't change things at all. No matter what the product/service is the 4P's still apply. The only major, but not unknown factor, was the avoidance of the big distribution/supermarket chains, which by definition localises the activity, but nothing else. Nothing wrong with that either as it fits squarely into 'Place' - i.e. where you sell. As a side issue in my later career as a Marketing Consultant I consistently found this to be a major weakness in most companies. They simply didn't focus enough on this and found themselves loaded with extra costs that undermined their profitability and effectiveness. Of course the aspects of lower prices for all customers must also be a consideration, plus even local people sometimes want non-local products.

I won't even open up the whole commercial aspects of Needs versus Wants, although I suspect your philosophy concentrates more on the former than the latter.

I also won't bore you with the many sordid pressures applied to suppliers of all sizes to major supermarket chains, and of course single ownership of many overtly different chains exacerbates the problems.

Now supermarkets are a mixed blessing. On the one hand we all want lower prices which can only come through bulk buying, as this reduces the costs to the producer - fewer deliveries means lower costs. However it does make the producer far more vulnerable to price pressures, and being trapped in a system where he has almost no control. Forming coalitions to fight this hasn't really worked - note the milk distribution systems as an example.

Farmer's markets are of course the ideal localised solution, and it has always escaped me why these haven't developed more in France.

Other products are not so easy to organise, and France has now been remarkably foolish in my opinion by getting involved in controlling such activities as Puces and Brocantes and taxing the results. As these are areas of real recycling (see children's toys as a great example), this is a real shooting oneself in the foot exercise by Governments. Note this wasn't something initiated by Hollande for a change, although I doubt if he will change anything. These are also ideal places of Distribution and retail sale by small producers of all kinds - the very basis of entrepreneurial activity at the family level. Plus they work at City, Town and Country levels.

Yes, I do believe you are a Dreamer, Brian, but there's nothing wrong in that. It is the dreamers in this world who lead us to hopefully better things. Even seeking Utopia is no bad goal, just extremely optimistic in my view.

24

Ben and Norman, look at http://www.aftermathproject.com/Another-life-is-possible

The Aftermath Project is not just another apocalyptic warning in the form of people from the ideological left or 'alternative' scene telling us doom is upon us. These people are explaining reasons (some, not all) for the crisis. It may not suit crisis-deniers but by simply denying the existence of a crisis that emanates out of capitalist society that is affecting all 204 nations to some degree or other, and often adversely in poorer ones, is just plain foolish.

Yes Norman, to study social anthropology then to work in that general area and acquire human rights in that work along the way demands either belief in humanity or resignation. I believe in the fundamental good of the species, the problem is that they are also very vulnerable.

Darwinism is a difficult one to square. If one is talking about evolution then that has gone a long way forward beyond Darwin himself. When we consider what are referred to a Darwinian principles in the modern world then we must be cautious. They include selective survival of the fittest, the justification for much 20th century belief leading to Hitler, Stalin and subsequent leaders' pogroms, eugenics and such euphemistic 'scientific' ideas for making the world entirely Anglo-Saxon. They still persist today and we have seen shades of it in the campaigning for the presidential election in the USA and Copé in his desire to become UMP chair has let more than a few slip out here.

But certainly, on the basis of personal aspiration alone we are different and that cannot be extracted like a tooth so it needs to be accomodated. Those who are now excessively wealthy and care little for redistribution (out of which they might also earn money) do not project hope on people. Yes, people aspire to become rich and all that goes with that. When a record Euromillions jackpot came up a couple of months back some of us had a little chat on Facebook. How many of them suggested benevolence to people in real need? Well none, albeit the way I did was by saying the largest part of the money would go toward setting up a trust for the study of childhood. If I won €192 million, my family and I would probably be greedy if we kept 12 million and used the rest chaitably. People do not think that way and that is because the example we have been presented with encourages what I consider misery hoarding personally but has other names in economics.

So Norman, perhaps I am an idealist and dreamer but without a few of us in this world what hope has the human race got?

25

Hi Brian,

I covered some of these points in another reply to Ben, and of course in many ways I agree with you.

To me you have a more hopeful view of humanity than I do, in that you believe (hope maybe?) that putting any group of people together will not throw up the more aggressive or more ambitious, and the whole thing will propagate itself.

Wherever and in whatever system it seems to me that human nature will prevail and Darwinian principles will remain. I feel we must accept this. People ARE born with different resources - health, intelligence, etc. Short of trying to breed these differences out smacks of Hitler, and I don't think any of us would want to go down this path. As it is, there will always be a case made against inequalities for the very simple reason we aren't equal, but different, and I can't see humanity getting out of this condition in the near future.

I noted your careful use of the words 'becoming visible' and this is true, as the rich and even very rich have always been with us, usually operating in the 'black' economies. With your background as with mine, we both know that in many countries it was only such economies that kept society even part-way stable. Without the 'black markets' during and after WW2, all hope would have been taken away from people - and anyway there always was a frisson in 'dudding the taxman' as used to be the case in Australia. Again human nature.

I also remember young people talking to me in Eastern Europe as the Soviet Union retreated. Many if not most were terrified of what was to come. The call was for the 'nanny-state' part of Communism to be retained. The most common phrase I use to hear was 'none of us had very much, but we were all the same'. It wasn't true of course, but it was a comfort to believe it, and it certainly reduced social tensions. In very few years this completely changed as human nature re-asserted itself.

Systems can and do change, but in my humble and certainly commercial experience, people don't very much.

26

Norman, one serious problem is that the question 'where does the money come from' arises. If money went back to what it originally was, tokens used instead of barter to exchange commodities and capital which economic and political systems require handled in another way completely, then the distribution and use of both could be used according to needs. Thus naturally a 'socialist' system has taxation but one that works without exemptions, so that wages are taxed, savings are taxed goods and services are taxed but without those who are better than others escaping that. The means of production are simply owned by groups of individuals, entrepreneurs if you wish to call them that, rather than individuals. Profits are shared and redistributed after taxes, the boards of concerns are simply made up of worker representatives, entrepreneurs, other elected citizens and people from the political or administrative worlds to represent governance (not government). The people behind the companies, the entrepreneurs can be rewarded with higher income than the work force but at both ends nobody is overpaid and nobody is underpaid or exploited. The revenues of all taxation go to government for use for public services such as education, health and welfare and maintenance of the bureaucracy necessary to run the state. That's the simple version. Bits and pieces have been tried and perhaps that is what the Canadians were doing.

So far what we have seen has been corrupt, top heavy bureaucracies lead by political elites, often with a dictator or ruling family in power without real popular support and everything possible expropriated from the people without power. Behind the drawn curtains there has always been a very wealthy elite. Hence Russian oligarchs becoming very visible within months of the end of the Soviet Union, China having more millionaires than all of western European combined, etc.

27

Morning Ben,

I agree with most of what you have said, and I think there is a problem here in condemning the 'system' i.e. Capitalism, with ABUSE of the system, which is of course totally subjective. It depends where you sit in the structure as to how you view it.

I am tempted to paraphrase Churchill on Democracy, when he said it 'is the worst system - except for all the others', and my readings of the postings tends to confirm this reading.

Regarding the job losses, again it is seductive to blame new technology, but this is merely a new tool and the principles of financial survival as far as I am concerned remained fixed. We cannot go back to days of barter, at least in Westernised, essentially lesser agricultural societies, as most of us have little to trade in a basic (food) survival sense, and how do you value a plumber's time against bags of apples for example?

In our household my wife was a salaried employee all her life. That represented 'security'. Her secretarial skills were swiftly eroded by the new technology, but so were mine.

I started as an Illustrator and Commercial Artist, and the first 35 years of my working life were spent in this way - but constantly adjusting to new technologies on the way through. I naturally had to understand print, and I still have a copy of my old 'bible' of the 1950's called 'Graphics Master' which I often flick through in pure nostalgia. That reveals totally how in my entrepreneurial world how it was necessary to adjust and make best use of the new tools. It is Luddite to do otherwise.

The new 'tool' of the Internet has exploded the opportunities and lowered the costs of any person wanting to have try at earning an independent living, and I think that is great as it has released many from the petty and not so petty tyrannies of being a wage slave. France has been a major offender in this latter regard, but how soon people forget?

Golden Handshakes are relatively new, certainly at the levels we see today, and envy (including mine) is rife, and in many respects valid. However I suspect that few of us really despise the man or woman who has 'made it' directly through their own risks and efforts, although we often forget those who started this way.

What IS aggravating is the rewards given to those of companies where their contribution has not been to founding or developing business, but the direct opposite, often financial 'leeching' and destroying them through incompetence and seeming wilfulness and STILL getting millions as recompense. That is my view is abuse of the system.

I also believe the financial markets operate without conscience, and that we are under the thumb of unelected and ruthless people who destroy lives and companies at a telephone call, with no recourse at all to any form of social answerability.

Finally, I once read an internet site called 'How Stuff Works' on Money. What an eye-opener!

Essentially it is totally trust-based, even a land of dreams. I will try and find the site if it still exists and post it here. Put a lot of things in perspective albeit in a disturbing way.

28

Morning Brian,

reading the posts here, it confirms that I am not an economist, socialist nor even a capitalist - although I did make money using capitalist principles, working for capitalists, and do try to make money by selling what skills I have, so I suppose I fall in the last camp more than any other.

Re. your post 'there never being a system based on true socialism', which as I understand your thinking is 'redistributive'? Two small points if I may. Where does the money come from to be re-distributed in this philosophy? NB I am not being facetious, I really want to understand.

Two. I seem to recollect in the 50's(?) or thereabouts one of the Canadian States operated on an economic system which I think fits your philosophy? As I recall it was called Social Credit or something like that, and again relying on a dodgy memory ran along the lines of the total earnings of the State were calculated (somehow) and redistributed on a worth/need basis? I am sure you or some Canadians here could enlighten me on what happened to it, as I haven't seen reference to it either on these posts or anywhere else.

As at the time I remember thinking it was a seductive idea, until it was pointed out the fact that it would still require others to make the 'need/worth' judgement - e.g. politicians, and a horde of civil servants to operate it.

Anyone else remember this?

29

As for socialism and communism, there has never been a pure capitalist system working anyway in the world. There has always been more or less governmental influence. The Grameen bank that you cite was already before that bill known to be nothing more than a bank; although the amounts that they loan to people without any collateral they are not willing to renounce if the lenders can't pay, even if it destroyed their homes, families etc. And all it does for the large part of the lenders is to make them dependent on loans....

But the flaw of both communism and socialism, even in it's purest form, remain that it will be imposed to a country, it's inherent to the system. It can't function if let's say 15% of the population don't want it and become capitalists, exporting to other countries and making money with that.

And I don't share Glenn's arguments of jobs lost on a massive scale. The loss in itself is a fact of course but who would want to go back to the construction lines of the 30's to 60'? The problem with democracy is that it has some latency, a bank going bust, destroying investments cannot be cured by an election the next day. A government could decide to bail out the banks or at least guarantee the pension-investments, but would then have to cut in other expenses. And what other expenses? Don't start the discussion, it's hopelessly divided...

And for the "fat cats"; they're called "successful entrepreneurs" when things go really well ;-) And usually you choose a pension/investment fund because you expect to get higher yields compared to these boring, low-yielding state-papers.

30

Ben, there is naturally a problem in that no real 'sosialist' society has ever yet existed so is an untried proposition, sure a few little communal things but nothing of a scale that provides its citizens with the incentive to follow that path. Communism has so far always been hijacked and has become one of a dictatorship behind a mantle of a 'communal' society, a centralised state capitalist system in which the population share few if any of the benefits of the accumulation of capital or a very fragile attempt to live literally by the book as written by Marx which he in no way ever intended to be attempted. So, yes capitalism is the only tried and tested system. It has now totally failed because what it has always had in common with the socialist principle was the promise of an equal chance for all. Now that is becoming something exclusionary. Only a few individuals actually break through the barriers between them and what many normal people aspire too. As has been said by several economists in recent years, we are now at the stage when it is easier to win a lottery than to become rich. Capitalism is now, unfortunately, beginning to also preside over increasing restrictions on the democratic liberties of individuals thus the political freedoms you refer to are in danger. The recent news that the Prime Minister, Sheikh Hasina Wajed has approved the Grameen Bank (Amendment) Bill in Bangla Desh is a typical example, when one considers it is owned 94% by its lenders and the remaining 6% by the government. Now they will control it from parliament. Very democratic, of course. These things happen under our own feet in more subtle ways too but we are in a 'free', 'democratic' society and we're OK. Well ask people on SFN whose pensions went or were undermined went banks went bust and their directors walked away with a golden handhake and pension of more each week than we will ever receive in sum total! Capitalism, an equal chance to go to the wall for us all, ensured by the fat cats.

31

It's funny how in times of economic crisis criticisms that basically refer to the old, simple and therefore seemingly effective Marxist dual society become popular. When the capitalist system works they are a lot more subdued :-)

But anyway, a form of capitalism can work. After all the system was and is responsible for a lot of achievements, amongst which economic growth and it's associated benefits,and a certain amount of political freedom.

When capitalism isn't considered as the success of few, disgustingly rich people in the but as a system in where both partners, the government and the industry takes their responsibilities then you might just end up with e system that works.

Socialism and communism will fail as a system because they are coursed upon a nation as history also has abundantly shown....

32

Just followed the video from The Positive Money team, it all makes sense to me..... done my bit

Thanks Brian

33

Now I have websites you all ought to look at

http://www.positivemoney.org.uk/

http://www.aftermathproject.com/Another-life-is-possible

The interviews are long but listen to some of them. It all helps make sense of a world that Glen has asked a very sensible question about and when that sense is heard and read shows us how powerless we all are as individuals.

34

After the last book recommendation I decided I should have a look for others since they help me professionally. However this one is a wowee read: 'Debt: the first 5000 years' by anthropologist David Graeber published in 2011 is a good read that takes us up to the 1971 events that put us on the road to where we are now. Some things need explanation and back to Glen's question and really the truth behind the whole issue is the supply of 'wealth' in the world and actually there is none. We know that just about every one of the 204 countries on this planet is in debt, what then does the immense personal wealth of a few individuals mean. Well, if all countries filed bankruptcy at the same time then those people would be living on gruel like the rest of us, capitalism would be a totally failed system and what Graeber wrote about would need to go the full cycle all over again to recreate the world we know now. If anybody was ridiculous enough to allow that to happen, of course.

35

Sure, but recent plans for tidal turbines in the Severn brought the same howls of protest as an actual barrage.

36

Yes Brian the tidal scheme on the Rance in Brittanny/Normandy was built in the 60's I believe. But tidal barrages are not much more than the latest version of the Tide Mill at Woodbridge. Filling a basin at high tide and releasing it later through a turbine. Tidal turbines are driven directly by the tidal flow and are much more efficient working in both directions of the tidal stream.

37

If anybody has the desire to read a serious book then take a look at this one:

http://www.amazon.co.uk/Aftermath-The-Cultures-Economic-Crisis/dp/0199658412

It explains some of the things we are discussing here. These are some of the world's top analysts of what is happening.

38

Tidal power turbines as opposed to wave power devices sit on the sea bed and are invisible.

39

The same with Morecambe Bay.

40

We moved here from Swansea. Mention tidal barrier and Gower and things get heated. The notion of the Severn barrier goes back to around 1850 but nobody has ever made it happen because of exactly what you say Glen, albeit it at communal rather than individual level such as Ilfracombe making Lord Sainsbury's life a misery for his party even reconsidering anywhere near there and then all of the Green party groups, RSPB and others because of SSSI status and the effect on the ecology. Yet everybody would love the cheap power it would produce.