Capitalism, road to damnation?

As a youngster and quite new to the political and economic game I have witnessed mainly negative events, which made me quite cynical. Just last night I was pondering; is there any way that our (EU/USA) capitalistic system will ever last?

The problem is that capitalism is based on a constant growth of population and the increased amount of money circulating the market. Whether inflation occurs "naturaly" or "artificially", it must be present. The damage long term deflation can cause is incalculable. Debts will increase while salaries stagnate, money will be gathered instead of invested with all the consequences that will entail, etc. etc.

At this moment we are all witnessing the problems this endless growth produces. We are living in an overpopulated world with an increasing amount of elderly people. We need an increase in the working population in order to sustain the social securities our parents and grandparents have built up, but this is impossible to achieve with the current crises and consequently decreasing birth rate. Here in the Netherlands we see our social securities decrease by the year.

With the technological developments in the last decades many jobs have, and probably more will, become automated so that less human resources are required for the same amount of work, thus job availabilty decreases. Altough technological advances do require manpower, I believe this does not compare to the jobs lost because of these same technological developments (assumption). Also, education becomes more and more expensive so the percentage of high educated workforce will decline which results in a schoolsystem that does not correspond with the labour market.

Of course there are many more negative consequences, but I just wanted to list a few so you'll get what I'm trying to say. To my believe we are heading for a vicious circle which will be very hard to get a hold on. Do you believe we'll find a solution to these problems, or that a different system should be put in place in order to maintain our lifestyles?

The solution is to use a mix. Pure capitalism doesn't exist. Anywhere, that I'm aware of. We're just using it in degrees, mixed with socialism (labor laws, OSHA, EPA, etc), and probably a few other isms.

Time will tell which countries will adapt to the new normal the best. Greed is certainly something that will need to be combated, but so will lazyness. Our path can go one of two ways...we can aspire for full employment, which will involve full time equalling fewer and fewer hours, to force companies to hire more employees to maintain coverage. The other road is to penalize wealth past specified amounts, to encourage something more akin to actual trickle down, and to use the more garnished from those top earners to further expand welfare.

Pure Keynesian economics doesn't work either

We need to move away from the current system we have in place to a more entrepreneur-friendly system. We need a market that empowers workers, not capitalists. One way we can do this is by eliminating business licensing or, at least, loosening the restrictions. Now, that's not to say that certain professions will not require licenses at all (like doctors for example) but abolishing business licensing will encourage individuals to become entrepreneurs and work for themselves. The current system makes it absolute hell to work for yourself, which is why few do. Because of this, most people are forced into a position where they have to take a corporate wage-slave job. This is also why we have such a problem with unemployment, because there are only so many jobs out there. In a system where jobs can be created by the workers, not the capitalists or the government, we will see far more prosperity and a much lower unemployment rate.

Hmm? said:

As a youngster and quite new to the political and economic game I have witnessed mainly negative events, which made me quite cynical. Just last night I was pondering; is there any way that our (EU/USA) capitalistic system will ever last?

The problem is that capitalism is based on a constant growth of population and the increased amount of money circulating the market. Whether inflation occurs "naturaly" or "artificially", it must be present. The damage long term deflation can cause is incalculable. Debts will increase while salaries stagnate, money will be gathered instead of invested with all the consequences that will entail, etc. etc.

At this moment we are all witnessing the problems this endless growth produces. We are living in an overpopulated world with an increasing amount of elderly people. We need an increase in the working population in order to sustain the social securities our parents and grandparents have built up, but this is impossible to achieve with the current crises and consequently decreasing birth rate. Here in the Netherlands we see our social securities decrease by the year.

With the technological developments in the last decades many jobs have, and probably more will, become automated so that less human resources are required for the same amount of work, thus job availabilty decreases. Altough technological advances do require manpower, I believe this does not compare to the jobs lost because of these same technological developments (assumption). Also, education becomes more and more expensive so the percentage of high educated workforce will decline which results in a schoolsystem that does not correspond with the labour market.

Of course there are many more negative consequences, but I just wanted to list a few so you'll get what I'm trying to say. To my believe we are heading for a vicious circle which will be very hard to get a hold on. Do you believe we'll find a solution to these problems, or that a different system should be put in place in order to maintain our lifestyles?

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Capitalism is just a model invented to make best use of current realities. Once those realities change, a more fit model will come about.

That's not cause for concern. It's the transition period we need to worry about.

Hmm? said:

As a youngster and quite new to the political and economic game I have witnessed mainly negative events, which made me quite cynical. Just last night I was pondering; is there any way that our (EU/USA) capitalistic system will ever last?
.....
Of course there are many more negative consequences, but I just wanted to list a few so you'll get what I'm trying to say. To my believe we are heading for a vicious circle which will be very hard to get a hold on. Do you believe we'll find a solution to these problems, or that a different system should be put in place in order to maintain our lifestyles?

Click to expand...

Oh, man, is it going to get bad in Holland. You are right. It will be the secular version of Hell for the dutch. Luckily I live on the other side of the boarder.

WCH said:

Pure Keynesian economics doesn't work either

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It does help to apply it intelligently. You are right.

Thanks for the great feedback !!

I agree we should adept to the changes and its the transition period that we need to worry about. But I have a feeling this is more up to "them" than it is up to "us". Don't you think the current capitalists at the high end of the pyramid will do everything to counteract these counter-capitalistic developments as to keep their wealth? Our privacy is being heavily invaded so I guess very easy for "them" to suffocate these movements.

Of course, there will be a point where an artificially kept alive capitalism will just crash and money has no value. At that point once again we will all be equal and there will be place for a new system. But at which cost?

TeleKat said:

We need to move away from the current system we have in place to a more entrepreneur-friendly system. We need a market that empowers workers, not capitalists. One way we can do this is by eliminating business licensing or, at least, loosening the restrictions. Now, that's not to say that certain professions will not require licenses at all (like doctors for example) but abolishing business licensing will encourage individuals to become entrepreneurs and work for themselves. The current system makes it absolute hell to work for yourself, which is why few do. Because of this, most people are forced into a position where they have to take a corporate wage-slave job. This is also why we have such a problem with unemployment, because there are only so many jobs out there. In a system where jobs can be created by the workers, not the capitalists or the government, we will see far more prosperity and a much lower unemployment rate.

Click to expand...

i can't agree with that
getting a license to operate a business is amazingly simple in the USA
probably a reason why so many immigrants do so, so soon after they arrive
America truly is a land of opportunity

there are certainly restrictions and regulations that unnecessarily impede business. so identify them and work to have them changed. but it is my experience that most of these government imposed limitations are there for the greater good. and if they are not, then there should be little real opposition to eliminating them

i am hopeful we will one day adopt one of Milton Friedman's ideas. that we will tax all income ... BUT we will also provide a monthly check to all income earners who do not realize an income that would provide for a basic standard of living. socialism, yea, but also capitalistic in that all income is taxed

my expectation is our nation, and later the world, will evolve such that most of us are contractors, working for ourselves, rather than as wage earners, receiving a pay check. the trend has already been established. that one could expect lifetime employment with one employer and walk away with a defined benefit pension ended with my Dad's generation - and i'm 62. the only remaining exceptions are government jobs and employees of monopolies/utility companies
the rate of change of business is not unlike that of technology. demand for the same employees, with the same skill set, will vary over time, making it unprofitable to retain employees whose skill set is no longer needed by the employer. we see some of this today as technologies replace the need for some skill sets: receptionists, secretaries, bank tellers come immediately to mind
but businesses will also need changed skill sets as they respond to changes in market demands. so, they must shed those who are without the new talents that will be needed to penetrate new markets
most of us will have to look for short-medium term contracts to perform rather than long-term jobs. and that causes the person to need to acquire business acumen. rather than showing up on the job with a particular skill set, those contractor/entrepreneurs will need an additional complement of abilities to be able to market their offerings, maintain financial and other records, and understand how to price their labor/skills/output
and that is where we now have fallen short. it does not matter if you are the world's best welder, if you are unable to find buyers, manage money, and price your product/services profitably, you will fail as a business owner/contractor
and we are not presently very good at imparting those skills to those who very much need them for the economy's future
that is today's real failure to advancing business ownership, while over-regulation wrongly takes the blunt of the blame