Austrianites, please explain zero-growth capitalism

[RNL]

This seems to be a largely unspoken assumption within austrianite ideology (that is 'libertarianism').

Often the most effective starting point for a critique of capitalism is the incompatibility of a finite world with a system predicated on infinite growth. It's a very easy contradiction to understand, it doesn't require very abstract theory, you just have to illustrate that capitalism requires growth. People are more receptive to talk of socialism when you've first shown them that capitalism forever is simply not an option - that the question isn't whether an alternative is desirable, but rather which alternative would be preferable, because one way or another, for better or worse, capitalism is going to end.

Austrianites seem a little vague on this, but there is definitely a notion in their heads that zero-growth capitalism is possible.

How so?

[Judicator]

When population is stable and savings equals depreciation.

[RNL]

So it's based on the assumption of an end to competition between capitalists, and a corresponding end to technological innovation in the forces of production, along with an end to the variable character of labour-power?

Or should that be the non-existence of the variable character of labour-power, seeing as that implies class struggle?

[Judicator]

So it's based on the assumption of an end to competition between capitalists, and a corresponding end to technological innovation in the forces of production, along with an end to the variable character of labour-power?

Or should that be the non-existence of the variable character of labour-power, seeing as that implies class struggle?

I think just the technology part. If you stop innovating, eventually you'll hit a productivity ceiling where capital can't be more productive and you can't grow (under any economic system, not just capitalism).

[RichardAWilson]

Which'll never happen.

Technological innovation is endless, regardless of the economic system.

The ultimate question concerns the innovation's affect on life in general.

After all, huge leaps in innovation and efficiency have been made since 1968. Meanwhile, inflation-adjusted incomes have remained unchanged for the middle classes.

The difference between capitalism and socialism is that, under capitalism, such innovations (such as life saving cancer treatments) are restricted to those that can afford them for the benefit of those that own them.

[kapitalyst]

How so?

Growth actually isn't finite... nor is wealth, nor is capital. If you can make a machine or computer, a better one can be made. And there's a big universe out there, full of unseen and unexplored planets and bodies -- full of untapped resources beyond your wildest expectations. Maybe one day "foreign policy" might include relations with Omacron Persei-8's leader Lrrr!


http://www.nwdnb.co.uk/image.php?u=207&dateline=1137667885


:lol:

There's no concrete barrier that ends growth or capitalism. I think it's ridiculous to believe that we will ever be "finished" with progress... that we'll all just lie around on fluffy pillows and eat potato chips forever... or that humanity will some day be free of all problems. Sounds more like a religious belief than a political one.



The difference between capitalism and socialism is that, under capitalism, such innovations (such as life saving cancer treatments) are restricted to those that can afford them for the benefit of those that own them.

BS... no offense... Health care should be free, just like police and firefighters. You could even argue health is more important than education. If we size down our bloated, overweight government and stop wasting money on crap like invading other kids' sandboxes, free health care will be easily sustainable and affordable.

[Blackscare]

I think it's ridiculous to believe that we will ever be "finished" with progress...

Likewise it's ridiculous to believe that as technology advances and automation, as well as things like nanotech are implemented, we will somehow be able to maintain levels of employment sufficient to sustain a market economy. Or we could finish the job that's been undertaken in past years and convert almost everyone to very low-paying service sector jobs that provide minimal security. But then, who would want to live in such a world when it's no longer necessary (blatantly so, I should say). At that point the only reason to continue with a capitalist mode of production would basically be sentimentalism.

[RichardAWilson]

Health care should be free, just like police and firefighters.

I wholeheartedly agree.

Furthermore, since work is required to sustain life, every able-bodied American wanting to work should be guaranteed a full-time job.

Since a college education is needed for a fair chance in life (I.e. Opportunity), Americans should be guaranteed an affordable college education.

[Judicator]

I wholeheartedly agree.

Furthermore, since work is required to sustain life, every able-bodied American wanting to work should be guaranteed a full-time job.

Since a college education is needed for a fair chance in life (I.e. Opportunity), Americans should be guaranteed an affordable college education.

There are plenty of respectable professions which only require trade school. In a lot of white collar fields there are certain credentials (CPA, Actuarial exams) that matter more than where you went to school.

At some point people will realize college is not the magic bullet for high wages so many like to claim it is. There's really no reason everyone should be reading Herotodus before they go to work at the marketing department of some large company, nor is there any reason to suspect doing so will increase your wages.

[RGacky3]

You can't have zero-growth Capitalism.

As an industry goes over time you have falling rates of profits due to technological advances and a higher capital to labor ratio, and lowering prices to due higher productivity. Along with the higher productivity you'll also over time lower employment needs, lowering demand.

When this happens you need new industries to invest in and new markets to tap.

Also with Capitalism you have a constant widening inequality gap, to undo that you need new markets and new industries to make NEW Capitalists to kind of shift around the class structure, and bring the money down somewhat.

Capitalism rewards profit, highest profit, which means any capitalist institution that has the higher profit will win investment and support.

All of these problems are what eventually brings Capitalism down, builds bubbles and so on, Capitalism is filled with internal contradictions. Capitalism was great for industrialization, but now its not working anymore.

[RichardAWilson]

I don't believe that's the issue.

I believe the issue has more to do with employers hiring college graduates over those that don't have a degree.

In today's economy, that's no guarantee. Nonetheless, a piece of paper does improve one's odds of being hired.

[kapitalyst]

As an industry goes over time you have falling rates of profits due to technological advances and a higher capital to labor ratio, and lowering prices to due higher productivity. Along with the higher productivity you'll also over time lower employment needs, lowering demand.

When this happens you need new industries to invest in and new markets to tap.


This is why industries change... out with the old, in with the new. And higher productivity and lower prices doesn't necessarily mean less profit, and certainly doesn't mean there is an economic contraction or recession.

In many industries, lower prices could be compensated for with greater volume -- provided demand is there. Lowering prices throughout an economy also offsets itself and increases the standard of living. Input costs for production are lower, living expenses are lower... purchasing power goes further.



Also with Capitalism you have a constant widening inequality gap, to undo that you need new markets and new industries to make NEW Capitalists to kind of shift around the class structure, and bring the money down somewhat.


How much exactly has this gap widened since 1900?



All of these problems are what eventually brings Capitalism down, builds bubbles and so on, Capitalism is filled with internal contradictions. Capitalism was great for industrialization, but now its not working anymore.

Erm, what? :confused:

[graymouser]

Technological innovation is endless, regardless of the economic system.
Do you actually believe that diminishing marginal utility doesn't exist for technological innovation? That is, that we will NEVER get to the point where more effort goes into innovation than reward? That seems like an unsound view of economics and of simple reality.

[RGacky3]

This is why industries change... out with the old, in with the new. And higher productivity and lower prices doesn't necessarily mean less profit, and certainly doesn't mean there is an economic contraction or recession.


Except they don't change, new industries pop up, or old ones are consolidated.

Lower prices and higher productivity does not necessarily mean less profit, but the tendancy is for the rate of profit to fall given productivity hikes (especially due to technology), there are ways to offset this, but when/if those fail, which they always do, you'll have a contraction.


In many industries, lower prices could be compensated for with greater volume -- provided demand is there. Lowering prices throughout an economy also offsets itself and increases the standard of living. Input costs for production are lower, living expenses are lower... purchasing power goes further.


Exactly PROVIDED DEMAND IS THERE, thats why you need purpetual growth and new markets all the time.

Lowering prices only increases standard of living IF wages don't stagnate and there is'nt high unemployment (that gives downward pressure to wages), and unless you have a constantly growing economy, or extremely strong unions, there is no way thats gonna happen.


How much exactly has this gap widened since 1900?


http://l.yimg.com/a/i/ww/news/2011/02/23/winners2.jpg




Erm, what? :confused:

Capitalism's internal contradictions eventually lead to its collapse, these internal contradictions, i.e. the need for continual growth end up creating bubbles which burst and then contractions.

[RichardAWilson]

Do you actually believe that diminishing marginal utility doesn't exist for technological innovation?

Yes and no. There are entire fields of science and technology that we haven't even broke the surface on. Furthermore, microprocessors have been doubling and doubling (I.e. Moore's Law) and diminishing marginal utility hasn't even come close to being a problem in the semiconductor business. Intel is more profitable than ever before. Zero-growth based on technological stagnation is not a serious matter (at least not in the next hundred years). Zero growth is reminiscent of Malthusian overpopulation.

A much more serious matter is how technological innovation will contribute to income inequality and joblessness. (I.e. Capitalism) Millions of jobs have been eliminated because technology has reduced the need for human labor.

Which would be a good thing if it liberated the toiling masses for more mind-based and intellectual careers and positions (I.e. Writers, musicians, librarians, professors, philosophers, scientists, architects, urban planners and so forth).

However, under capitalism, there are few positions available in those fields and the "liberated" are left to waste away on public subsistence.

[RichardAWilson]

How much exactly has this gap widened since 1900?

Well, I know it's the same as it was in 1929. Then, like now, farms and homes were being foreclosed and bankruptcies were soaring. Real wages (for working class Americans) were unchanged during the "Roaring Boom," as the gains flowed to the Wall St. Elite.

[kapitalyst]

Except they don't change, new industries pop up, or old ones are consolidated.


Is this just rewording? Some industries can and do change. Some die. New ones are born. You talk about this like it's a bad thing.



Lower prices and higher productivity does not necessarily mean less profit, but the tendancy is for the rate of profit to fall given productivity hikes (especially due to technology), there are ways to offset this, but when/if those fail, which they always do, you'll have a contraction.


This doesn't "always fail". That's a sweeping generalization you, well... pulled out ye arse, I suppose. :lol:



Exactly PROVIDED DEMAND IS THERE, thats why you need purpetual growth and new markets all the time.


Regardless of economic system, we need perpetual growth. Replacing old markets with new ones is a good thing... progress. We replaced the buggy industry with the automotive industry. One day we'll replace that industry with something better. TRPF, if you believe in it, encourages this.



Lowering prices only increases standard of living IF wages don't stagnate and there is'nt high unemployment (that gives downward pressure to wages), and unless you have a constantly growing economy, or extremely strong unions, there is no way thats gonna happen.


Except this is wrong... If the dollar suddenly doubled in value tomorrow, and all prices and wages remained unchanged, the standard of living would be higher.

By "extremely strong unions", I'm sure you mean unions supported by the state... unions backed up by union laws and regulations. These are actually counter-productive, and effect economic systems negatively.

As for your charts, do you have that in higher resolution? It's hard to distinguish the lower brackets. And if it's trying to say wages are totally unchanged during that time period, that is totally false. Wages have gone up, but unfortunately they've been sapped by inflation -- the purchasing power of wages, despite being higher in dollar terms, are lower.



Capitalism's internal contradictions eventually lead to its collapse, these internal contradictions, i.e. the need for continual growth end up creating bubbles which burst and then contractions.

Then everything will collapse, capitalism or not, if you don't believe we have the potential for limitless growth. And this is also not a bubble mechanism.

[RGacky3]

Is this just rewording? Some industries can and do change. Some die. New ones are born. You talk about this like it's a bad thing.


Its not just rewording, some chance, some die some new ones are born is not the point, the point was that AS industries become more productive and as they centralize, and when that happens new growth needs to happen.


This doesn't "always fail". That's a sweeping generalization you, well... pulled out ye arse, I suppose. :lol:


They was to offset the tendancy of the rate of profit to fall are either growth (new markets and new industries), OR non-market policies, regulations, unions and so on, but they also have some market solutions, for example if there is no new demand, or new markets, you have to CREATE a new market, so you create the mortgage market, you securitize things, and so on, i.e. you create bubbles.

Me saying they always fail is just using historical references.


Regardless of economic system, we need perpetual growth. Replacing old markets with new ones is a good thing... progress. We replaced the buggy industry with the automotive industry. One day we'll replace that industry with something better. TRPF, if you believe in it, encourages this.


Thats not growth, if you make one less buggy and one more car its not purpetual growth. Under Capitalism you need growth NO MATTER WHAT, even if you don't have a growth in Market demand, even if you don't have new technology requiring growth.

It has to grow no matter what, its not growth contingant on need, its purpetual and constant growth, thats just insane.


Except this is wrong... If the dollar suddenly doubled in value tomorrow, and all prices and wages remained unchanged, the standard of living would be higher.


Think about what you said ... If the dollar doubled in value, but all prices and wages remained the same .... That would mean that nothing would change at all, because they'd get the same wage and pay the same price, the value of the dollar IS prices.


By "extremely strong unions", I'm sure you mean unions supported by the state... unions backed up by union laws and regulations. These are actually counter-productive, and effect economic systems negatively.


I does'nt matter HOW they are strong, we arn't making a moral argument here we are making an economics one, either way, however they get strong does'nt matter, I personally prefer without the state because I'd rather the unions not be tied to political parties, but thats not the point, what matters is that they ARE strong so that they pull the wages down.

(BTW, if your against government regulations, top thing you should fight against is corporate personhood, and actually encorporation.)


As for your charts, do you have that in higher resolution? It's hard to distinguish the lower brackets. And if it's trying to say wages are totally unchanged during that time period, that is totally false. Wages have gone up, but unfortunately they've been sapped by inflation -- the purchasing power of wages, despite being higher in dollar terms, are lower.


Adjusted for inflation is the way we look at things, in a perfect functioning capitalist economy inflation should go along with growth to avoid deflation.

If your trying to say its inflation that really is taking the working class's money .... Well look at the chart again, obviously its not.

(BTW that chart stops at 2007, and since 2007, its gotten MUCH worse.)


Then everything will collapse, capitalism or not, if you don't believe we have the potential for limitless growth. And this is also not a bubble mechanism.

Not a system that eliminates the internal contradictions of capitalism.

We don't have potential for 3%+ growth each year, thats simply insane, and its that need for growth that is a huge factor in creating bubbles.

[Baseball]

[QUOTE]Thats not growth, if you make one less buggy and one more car its not purpetual growth.

How about one less buggy and five new cars?


Under Capitalism you need growth NO MATTER WHAT, even if you don't have a growth in Market demand,

Well yes, I suppose the buggy makers needed people to continue to purchase buggies as opposed to cars.
It is not clear why the buggy makers in a socialist community would not need that to continue either.



even if you don't have new technology requiring growth.

You make it sound as if "new technology" just drops out of the sky.
Computers drove out typewriters for the obvious reasons.


It has to grow no matter what, its not growth contingant on
need,

As defined by whom and by what means? Chrysler was producing buggies. There was no growth in that industry because there was no need; he moved in autos. There was "profit" (ie surplus) to be found there at a greater rate than in producing buggies.
It is based upon need. The company cannot grow if nobody wants the product.

[RGacky3]

How about one less buggy and five new cars?


So before it was 5 buggies and 0 cars, now its 4 buggies and 5 cars? Well then you need 4 new people to buy stuff, or some people to buy 2.


Well yes, I suppose the buggy makers needed people to continue to purchase buggies as opposed to cars.
It is not clear why the buggy makers in a socialist community would not need that to continue either.


Never said they would'nt, replacing industries is not the issue here, its purpetual growth.

Your not getting this at all.


You make it sound as if "new technology" just drops out of the sky.
Computers drove out typewriters for the obvious reasons.


No Shit, your totally not getting my argument, re-read it.


As defined by whom and by what means? Chrysler was producing buggies. There was no growth in that industry because there was no need; he moved in autos. There was "profit" (ie surplus) to be found there at a greater rate than in producing buggies.
It is based upon need. The company cannot grow if nobody wants the product.

Again, NOTHING TO DO WITH MY ARGUMENT.

[Baseball]

[QUOTE]Never said they would'nt, replacing industries is not the issue here, its purpetual growth.

Your not getting this at all.


Gacky, the buggy company would need perpetual growth under your theory- else capitalism comes down like a deck of cards.
That it didn't would seem evidence to negate your concern.

You're not explaining why the buggy companies in a socialist community would not need to grow perpetually in order to justify its existence.

[RGacky3]

Gacky, the buggy company would need perpetual growth under your theory- else capitalism comes down like a deck of cards.
That it didn't would seem evidence to negate your concern.


No companies can grow and/or die under capitalism, the system as a whole needs purpetual growth, almost all economists understand this, and it has nothing to do with buggies vrs cars, unless you can understand the basic economic principles of my argument you can't debate against it, your not understanding the basic principles of my argument.

It has to do with productivity rising leading to a tendancy for for profits to fall (falling prices and a higher captial/labor ratio), which in turn creates a demand shortage due to productivity meaning a lesser requirement for labor to meet the same demand, which in turn creates a lack of demand due to more people not recieving wages, and when you have higher unemployment it suppresses wages thus exhasberating the problem.

New innovations obviously produce growth, but they too consolidate.

In a socialist society you wont have the profit motive, nor will you have suppression of wages (due to the fact that the workers ARE the controllers of the produce).

[kapitalyst]

Me saying they always fail is just using historical references.


http://tnation.t-nation.com/forum_images/3/c/3c9b3-DrEvilRightMSPix.jpg



Thats not growth, if you make one less buggy and one more car its not purpetual growth. Under Capitalism you need growth NO MATTER WHAT, even if you don't have a growth in Market demand, even if you don't have new technology requiring growth.


This is a blatant misunderstanding of markets...



It has to grow no matter what, its not growth contingant on need, its purpetual and constant growth, thats just insane.


Same here. Economies don't have to grow constantly. There are cycles in markets. Markets should boom, slow down or correct and then grow again. Sometimes recessions can happen and roll the markets back. But life goes on and problems are rectified, then another growth cycle comes.

The growth on the long-term can continue indefinitely. Human and technological progress has no finish line.



Think about what you said ... If the dollar doubled in value, but all prices and wages remained the same .... That would mean that nothing would change at all, because they'd get the same wage and pay the same price, the value of the dollar IS prices.


Yes, I worded that very badly. My apologies. What I meant to say was this:

If the dollar doubled in value, prices would fall 50% (be cut in half). Even if wages remained unchanged, the standard of living would be virtually doubled.



I does'nt matter HOW they are strong, we arn't making a moral argument here we are making an economics one, either way, however they get strong does'nt matter, I personally prefer without the state because I'd rather the unions not be tied to political parties, but thats not the point, what matters is that they ARE strong so that they pull the wages down.


If unions aren't state-backed, they cannot be as powerful as you want them to be. If their demands were too extreme, a company can just fire all union workers. When unions are too powerful, it upsets the balance of power and obstructs business.



(BTW, if your against government regulations, top thing you should fight against is corporate personhood, and actually encorporation.)


This is completely wrong. This is like saying if you're against the government trying to regulate sexual activity between adults then you should be against marriage. Or if you're against denying gay couples the right to adopt, you should fight against adoption.

We're not against a legal system and laws. A fair and open judicial system is a good thing. Corporate law has to do with how a business and its owners are treated by courts -- not regulations.



Adjusted for inflation is the way we look at things, in a perfect functioning capitalist economy inflation should go along with growth to avoid deflation.


I see that you still don't understand monetary inflation and deflation.



If your trying to say its inflation that really is taking the working class's money .... Well look at the chart again, obviously its not.

(BTW that chart stops at 2007, and since 2007, its gotten MUCH worse.)


Actually, it is. Assume you're getting paid $10/hr... Five years later, all prices have doubled (50% devaluation of dollar), and your wage rises to $15/hr. You're getting paid more dollars, but you're actually 25% poorer. You'd need $20/hr just to maintain the same lifestyle you had 5yrs ago. It's the equivalent of no inflation, and prices remaining unchanged, but having your wage reduced to $7.50/hr.



We don't have potential for 3%+ growth each year, thats simply insane, and its that need for growth that is a huge factor in creating bubbles.

3% annual GDP growth is merely desirable, not required every single year.

[RGacky3]

Same here. Economies don't have to grow constantly. There are cycles in markets. Markets should boom, slow down or correct and then grow again. Sometimes recessions can happen and roll the markets back. But life goes on and problems are rectified, then another growth cycle comes.

The growth on the long-term can continue indefinitely. Human and technological progress has no finish line.


Yes they do have to grow constantly, 3% growth each year. I just explained why they need to grow, no economist disputes this, also economies don't "slow down" when a Capitalist economy stops growing it collapses unless a government comes in and fixes the situation, or you have non market forces countering the market tendancies.


If the dollar doubled in value, prices would fall 50% (be cut in half). Even if wages remained unchanged, the standard of living would be virtually doubled.


Then you'd have deflation, wages would plummet and investment would plummet as well, infact if the value of hte dollar goes up you'd have much less demand and thus excessive savings leading to a drop in demand.


If unions aren't state-backed, they cannot be as powerful as you want them to be. If their demands were too extreme, a company can just fire all union workers. When unions are too powerful, it upsets the balance of power and obstructs business.


Your first sentance is just your opinion, not based on reality, I would argue that unless Capitalists are backed by the state they can't exist.

As far as if they are too powerful argument, its simply not true, you fire all the union workers the union would retaliate, you would'nt get any production done, other sectors could strike, that would shut down your buisiness even if you get scabs.

What unions would do is do something to take care of the internal contradictions of Capital, which aparently you don't belive in.


This is completely wrong. This is like saying if you're against the government trying to regulate sexual activity between adults then you should be against marriage. Or if you're against denying gay couples the right to adopt, you should fight against adoption.

We're not against a legal system and laws. A fair and open judicial system is a good thing. Corporate law has to do with how a business and its owners are treated by courts -- not regulations.


well, if your for the government getting out of peoples lives then you should be against marriage as a state institution.

Labor laws are also treated by courts.


Actually, it is. Assume you're getting paid $10/hr... Five years later, all prices have doubled (50% devaluation of dollar), and your wage rises to $15/hr. You're getting paid more dollars, but you're actually 25% poorer. You'd need $20/hr just to maintain the same lifestyle you had 5yrs ago. It's the equivalent of no inflation, and prices remaining unchanged, but having your wage reduced to $7.50/hr.


inflation is'nt that high.

If inflation is 3%, and your productivity from last year has gone up %10, yet your wages are the same. the inflation is taking away 3% of your income, but the increase in productivity not being matched with an increase of wages is taking away 10% of your potential earnings.

Productivity has gone up faster than inflation, and corporate profits and executive pay have gone up much faster than inflation as well, those corporate profits and executive pay come from increased productivity that is NOT being compensated.


3% annual GDP growth is merely desirable, not required every single year.

When it drops below that you start getting serious problems that snowball into a recession.


This is a blatant misunderstanding of markets...


I see that you still don't understand monetary inflation and deflation.


No arguments there at all, nor have you actually addressed the internal contradictions of Capital accumulation that I mentioned.

[kapitalyst]

Yes they do have to grow constantly, 3% growth each year. I just explained why they need to grow, no economist disputes this, also economies don't "slow down" when a Capitalist economy stops growing it collapses unless a government comes in and fixes the situation, or you have non market forces countering the market tendancies.


Yet there have been years where there wasn't 3% growth and the world didn't end. You can have years where GDP goes into the red and the world doesn't end. What's important is that growth, on the long-term, continues. And that is important in ANY economic system.



Then you'd have deflation, wages would plummet and investment would plummet as well, infact if the value of hte dollar goes up you'd have much less demand and thus excessive savings leading to a drop in demand.


And this isn't what we're talking about, nor is it true. Quite a few countries have had major deflation as soaring standards of living, increased production and great growth. Singapore, for instance, has had rapid deflation and outpaced the rest of the world in growth by almost double or more. Gradual deflation through increasing supply and/or strengthening currency can be a very good thing. Savings are also a good thing.



Your first sentance is just your opinion, not based on reality, I would argue that unless Capitalists are backed by the state they can't exist.


And your argument would simply be wrong...



As far as if they are too powerful argument, its simply not true, you fire all the union workers the union would retaliate, you would'nt get any production done, other sectors could strike, that would shut down your buisiness even if you get scabs.


If I fire all the union workers and give a raise to non-union workers or those willing to renounce membership, then bye-bye union... they're out of my hair. And the mobsters at the top of the union foodchain can cry me a river! :cool:



well, if your for the government getting out of peoples lives then you should be against marriage as a state institution.


I am against the state institutionalization of marriage. I wasn't talking about that. Only marriage itself.



Labor laws are also treated by courts.


and?...



inflation is'nt that high.


:laugh::laugh::laugh:



If inflation is 3%, and your productivity from last year has gone up %10, yet your wages are the same. the inflation is taking away 3% of your income, but the increase in productivity not being matched with an increase of wages is taking away 10% of your potential earnings.


Shame our inflation isn't merely 3% though... and there isn't enough demand or domestic production...



Productivity has gone up faster than inflation, and corporate profits and executive pay have gone up much faster than inflation as well, those corporate profits and executive pay come from increased productivity that is NOT being compensated.


Erm... this can be disputed. Did the US economy doubled in size in the last 5 years? Nope... inflation > growth...



When it drops below that you start getting serious problems that snowball into a recession.


And a recession isn't the end of the world. Markets can recover and capitalism can continue along.



No arguments there at all, nor have you actually addressed the internal contradictions of Capital accumulation that I mentioned.

I don't see where you mentioned any...

[Agent Equality]

These opposing ideologies arguments are entertaining to say the least :laugh:

[La Comédie Noire]

Can't remember off the top of my head, but Marx actually theorized there was an ideal ratio which capitalism could sustain itself at indefinitely, barring external factors such as environmental destruction or resource depletion. However, this was all highly theoretical and the real world just isn't as cut and dry as all that.

[RGacky3]

Yet there have been years where there wasn't 3% growth and the world didn't end. You can have years where GDP goes into the red and the world doesn't end. What's important is that growth, on the long-term, continues. And that is important in ANY economic system.


When GDP growth drops below 3 you run the risk of going into a recession, and generally will if growth stays that low for that long.

Also eternal growth is not necessary in ANY economic system.


And this isn't what we're talking about, nor is it true. Quite a few countries have had major deflation as soaring standards of living, increased production and great growth. Singapore, for instance, has had rapid deflation and outpaced the rest of the world in growth by almost double or more. Gradual deflation through increasing supply and/or strengthening currency can be a very good thing. Savings are also a good thing.


Singapore has had HUGE GDP growth, and has forced saving, also Singapore had minor inflation, for only 2 years. Singapore survives due to huge foreign investment. (I personally think Singapore is riding a fine line and may fall apart, although its far from a Free Market Paradise, the state owns all the land, and 60% of the GDP).


If I fire all the union workers and give a raise to non-union workers or those willing to renounce membership, then bye-bye union... they're out of my hair. And the mobsters at the top of the union foodchain can cry me a river! :cool:


If that is true (which empirically is not true, most of the time the Capitalist needs the state protection to get rid of unions), then there goes one method to fix Capitalisms internal contradictions, your really just arguing against Capitalism.


I am against the state institutionalization of marriage. I wasn't talking about that. Only marriage itself.


... Which has nothing to do with what we are talking about.


:laugh::laugh::laugh:


Shame our inflation isn't merely 3% though... and there isn't enough demand or domestic production...


Your right it is'nt a mere 3%, its actually a mere 1.4%. (http://en.wikipedia.org/wiki/List_of_countries_by_inflation_rate) OHHHH, its those damn facts again, a Capitalists worst enemy.


Erm... this can be disputed. Did the US economy doubled in size in the last 5 years? Nope... inflation > growth...


http://www.tradingeconomics.com/charts/united-states-gdp-growth-rate.png

http://www.tradingeconomics.com/charts/united-states-inflation-rate.png
Not that far off.



And a recession isn't the end of the world. Markets can recover and capitalism can continue along.


BUt they don't, they never have, without huge government intervention, and now I would argue we are at a point where Capitalism cannot continue as is.


I don't see where you mentioned any...

Marx's tendancy for the rate of profit to fall, and along with that the demand fall that goes along with it, I spent time to explain it in my previous posts.

[RGacky3]

Internal contradictions



You can't have zero-growth Capitalism.

As an industry goes over time you have falling rates of profits due to technological advances and a higher capital to labor ratio, and lowering prices to due higher productivity (which leads to the amount of profit you can extract from production being lower). Along with the higher productivity you'll also over time lower employment needs, thus lowering the number people with disposable thus income lowering demand.

When this happens you need new industries to invest in (due to the rate of profit falling) and new markets to tap (due to the lowering of demand).

Also with Capitalism you have a constant widening inequality gap, to undo that you need new markets and new industries to make NEW Capitalists to kind of shift around the class structure, and bring the money down somewhat.

Capitalism rewards profit, highest profit, which means any capitalist institution that has the higher profit will win investment and support, meaning they all need to maximise profits.

All of these problems are what eventually brings Capitalism down, builds bubbles and so on, Capitalism is filled with internal contradictions. Capitalism was great for industrialization, but now its not working anymore.

[RichardAWilson]

I don't think the overall (I.e. Aggregate) rate of profit has fallen. Indeed, as the economy has transitioned from production to a financial-based one, the aggregate margin has risen. However, this is an illusion because the financial sector is a parasite on production and in the longer-run, there will have to be a reversion (I.e. Financial Collapse). We face two paths.

One path will be similar to Japanese-style stagnation (Which began around 1990.)

The other path is that we create another bubble, which will lead to an even more serious crash than 2008's.

We seem to be following a hybrid mixture of both paths. (Although with more emphasis on the former than the later)

[RGacky3]

I don't think the overall (I.e. Aggregate) rate of profit has fallen.

It has'nt, because of exactly what you said, and thats exactly the type of transformation a Marxist would expect from the "tendancy for the rate of profit to fall," a shifting of the economy to something else to compensate for that tendancy.

I think the Japanese stagnation will look mild compared to whats happening in the US, Japan through crisis, maintained enough employment, and keeped working class living standards and working class purchasing power high enough to keep demand up so they could crawl out of it. Also Japanese tended to save during the boom period, which game them income to continue consumption during the bust.

The US is in a totally different situation, the working class is being gutted, many people have no savings and are living hand to mouth, unemployment is going up, overall demand is dropping.

The US is in much worse shape than Japan was, so really whats probably gonna happen is just a spiral downward, a new bubble, some major major spending/another war or something, or a totally restructuring of the economy. I think the first 2 are the most likely and the first being the most.

[Dean]

There are plenty of respectable professions which only require trade school. In a lot of white collar fields there are certain credentials (CPA, Actuarial exams) that matter more than where you went to school.

At some point people will realize college is not the magic bullet for high wages so many like to claim it is. There's really no reason everyone should be reading Herotodus before they go to work at the marketing department of some large company, nor is there any reason to suspect doing so will increase your wages.

A liberal education is necessary for innovation, stability and heterogeneity of society. While many liberally educate themselves privately (i.e. reading in one's free time) many might not study a lot of important social, political and artistic traditions without having been presented with them in the right context. College performs this function to some extent, though liberal education is increasingly rare.

Transforming education into a work-preparedness camp will do little more than declare the supremacy of the economic life over our social life. Herodotus provides an incredibly valuable link to a time and place that cannot be replicated, and his histories detail events and processes that have had exponential meaning as society has progressed from those points. Similar things are true for nearly all major historical bodies of literature and culture.

Human beings have absolutely nothing to gain by obfuscating our rich history and culture from our education system.

[RichardAWilson]

I think we're going to continue running large deficits on defense spending and piss down tax-cutting. Meanwhile, the Federal Reserve will continue pursuing Quantitative Easing.

I happen to support Quantitative Easing.

However, it's still prolonging the inevitable. (Which isn't too bad from the perspective of the here and now)

We will need a radical restructuring of our economy for growth to be sustainable. (Which isn't going to happen because Washington and Wall St. aren't going to back the radical restructuring that we need to see.)

[RNL]

I think just the technology part. If you stop innovating, eventually you'll hit a productivity ceiling where capital can't be more productive and you can't grow (under any economic system, not just capitalism).
But the basis of technological innovation in the forces of production is competition between capitalists. So the assumption that this innovation will or could come to an end requires one of two other assumptions:

1) Further technological innovation becomes impossible.
2) Competition between capitalists ceases.

On what basis can either of these assumptions be made?

Furthermore, you'd have to assume an end to the variable character of labour-power; that is, you'd have to assume that capitalists would not attempt to increase their profit margins by making their workers work more intensely, for longer hours, and/or for lower wages, or exert political pressure (directly or indirectly) to reduce their own taxes, by having the state cut expenditure on things like social welfare, healthcare, etc, or shift the tax burden onto the working class - either of which would thereby reduce their workers' real wages.

On what basis can any of this be assumed?

Now, if you assume #2 above (that competition between capitalists ceases), then this isn't an issue, you can simply carry the assumption on to variable capital, where variable capital (ie: labour-power) somehow, arbitrarily, perhaps inexplicably, becomes constant capital.

How and why would this happen?

Sorry for the delayed response.

[Judicator]

A liberal education is necessary for innovation, stability and heterogeneity of society. While many liberally educate themselves privately (i.e. reading in one's free time) many might not study a lot of important social, political and artistic traditions without having been presented with them in the right context. College performs this function to some extent, though liberal education is increasingly rare.

We had an innovative, stable society long before liberal education was widespread. I think overspending on education is in part the consequence of a rich/innovative/etc society rather than the cause of one. One reason why people don't read in their free time is simply because they don't want to, so why push it on them?


Transforming education into a work-preparedness camp will do little more than declare the supremacy of the economic life over our social life. Herodotus provides an incredibly valuable link to a time and place that cannot be replicated, and his histories detail events and processes that have had exponential meaning as society has progressed from those points. Similar things are true for nearly all major historical bodies of literature and culture.

There's a work-preparedness component of education and a liberal education component, and there's no reason they need to be offered as a single product. If you're bored with the work-preparedness aspect of certain schools, don't go to them. This is the big divide between liberal arts colleges and research universities, and you can pick whichever one you like.

When you say Herodotus is valuable, are you claiming it's valuable because an understanding of history is good in itself, or because you just think historical knowledge is more likely to lead to a well-functioning electorate?


Human beings have absolutely nothing to gain by obfuscating our rich history and culture from our education system.

That's an unusual use of the term "obfuscate," but I assume you mean there's nothing to gain by removing the "liberal" from liberal education and instead training everyone to become computer engineers or whatever. Anyway, there's lots to gain - instead of blowing 40k/year on an education someone isn't going to use (a history major who becomes a salesman).

[Judicator]

But the basis of technological innovation in the forces of production is competition between capitalists.

Some models claim technological innovation is "exogenous"...it just happens. Companies then all implement the innovation and productivity goes up. Others claim that companies innovate because profits get really really low so the returns to innovation go up and it happens. There are a lot of inventions that become extremely useful later which initially have no commercial usefulness, which makes it hard to argue that these were created because firms were competing (the laser, the internet, the atom bomb, etc.).



So the assumption that this innovation will or could come to an end requires one of two other assumptions:

1) Further technological innovation becomes impossible.
2) Competition between capitalists ceases.


I'd go with (1). I agree with you that (1) seems highly unlikely, which I why I think an end to innovation is unlikely. However, if (1) happened, that would be game over for economic growth.


Furthermore, you'd have to assume an end to the variable character of labour-power; that is, you'd have to assume that capitalists would not attempt to increase their profit margins by making their workers work more intensely, for longer hours, and/or for lower wages, or exert political pressure (directly or indirectly) to reduce their own taxes, by having the state cut expenditure on things like social welfare, healthcare, etc, or shift the tax burden onto the working class - either of which would thereby reduce their workers' real wages.

Working longer hours and lowering wages doesn't make anyone more productive (in terms of real output per hour). But anyway all of that aside the point would still stand (if innovation stopped) that "eventually you'll hit a productivity ceiling." Even if labor is free and everyone works 24 hours a day, if you live in the stone age you can't produce much.

Tax is just a transfer between people and (beyond the impact on incentives) isn't going to change the level of productivity.