Ineffiency of Capitalism

[Regicidal Insomniac]

Heyo, comrades.

I've heard alot of accusations lately about how capitalism is inefficient, either in comparison to socialism, communism, anarchism, etc... But I've yet to really hear the reasoning or see the proof. So I was wondering if any of you could help me and explain how exactly capitalism is inefficient, maybe direct me to a good essay, recomend a good book on the subject, or just discuss it.

Thank you very much. :)

[Regicidal Insomniac]

Anybody? :unsure:

[Jimmie Higgins]

Capitalism at it's best, is only good at being efficient at making profits... this is often not efficient for meeting people's needs or being democratic (and that's being understated).

To me capitalism is very inefficient because of so many things used just to keep wealth out of the hands of people or the things to maintain the unequal structure of society. For example it is inefficent to have people who are homeless, living in cars or in boxes below downtown empty studios and appartments. It is inefficint to have a huge ammount of the legal system devolted to preventing companies from being sued and to allow them to sue other companies. All thoes highly skilled and traind people could have been persueing other professions rather than going into a field that ensured a stable and affluent life of helping one corportaion protect a tiny bit of it's fortune from another corporation. Advertising is also ineffective: Coke ads arn't there to inform people of this new concept called soda and all of the benifits of having a soda, it is there to tell people, don't drink another brand of soda, drink this one. Advertising serves no perpose in helping produce better, more efficient, or more abundant products, it is a wasteful expression of competition between companies.

When I was in high school and worked for a petty-borgoise grocer, I was schocked to learn that there are people representing corporations who come around and make deals with the store if they'll stock 12 more cokes than pepsis. I just always thought that the grocer got some kind of catalogue and ordered stocks of what he trhough his costomers wanted. Certainly, this is an inefficient middle man that is only necissary in helping the producer of one soda gain a little bit more of the market over it's simmilar-tasteing compedator.

[apathy maybe]

Did you know we could feed the entire population of the earth right now? We have the tech but the capitalists don't want to 'waste' the money.

When you think of capitalism think world, don't just look at what it's done for you in your country.

"Only when the last tree is cut; only when the last river is polluted; only when the last fish is caught; only then will they realize that you cannot eat money."

Under capitalism everyone (well most people in the rich countries anyway), have 2 or 3 cars. They have a washer and a dryer (for clothes and dishs). They have a computer and a telelivision etc. Why do they need 3 cars? Or a washing machine? Wouldn't it be better if people relised that it would be cheaper (both labour wise and environmentally) if they shared? Not everyone is using all there goods at one time. So when they're not useing them, why can't someone else?


Anybody?
18 minutes isn't long :D

[Regicidal Insomniac]

Originally posted by apathy [email protected] 18 2003, 11:48 AM
18 minutes isn't long :D
I think you forgot to check the time period, it was more like 12 hours and 18 minutes. :P :D

The reason I brought this up is because we obviously beat the capitalists on the moral stage, but I'd love to be able to take them down on their own turf- economics.

Thank you all very much. :)

[Invader Zim]

This is a little thing I wrote about 1/2 a year ago: -

Capitalism Economically Impossible

Ever thought about how a country grows from being a poverty stricken third world country to being a great super state of massive economic power, like the USA. It is in fact remarkably simple. All it takes is investment and the import and export of materials from and too an out side source.

All industry is divided into 5 different subsections. I will list 3 of them below, the other one is not really relevant to this situation: -

Primary Industry = extraction of raw materials
Secondary Industry= processing of raw materials
Tertiary Industry = Providing a service (i.e. bus, shop, library, etc)

As a country develops there is a noticeable change in major industries. Countries reach 5 stages in there growth of economic activity, these are: -

Stage 1. The traditional society, Backward economy little economic activity. Subsistence farming and no secondary/tertiary industry. (now extinct, no country I can think of in this level, however small communities in the Amazon may fall into this category.)

stage2. Preconditions for take-off, signs of economic activity, a little secondary activity.

stage 3. Take off, boom. Huge amount of secondary activity increasing amount of tertiary. Generally an industrial or agricultural revolution of some form.

stage 4. Drive to maturity. Huge rise in tertiary activity, slight drop in secondary, huge drop in primary industry.

Stage 5. High mass consumption. Very little primary secondary activity, huge tertiary activity.

These stages can be measured in a graph. The stages were initially created as part of the Rostow Model. The Rostow Model is inaccurate, as it does not take into account the economic situations of modern day countries. To climb the economic ladder a nation must export to foreign MEDC’s to gain the capital necessary to have a major economic increase. Rostows model assumes that nations are self reliant, and has major industrial and population changes to alter the economic stages of a country.




As a more economically developed country (MEDC) which has reached stage 5 the UK is a fine example. In the 1900's it had 54% of people employed in manufacturing. 49% in the 1950's and only 17% in 2000.

This means that Britain has a lot of recourses imported from Less economically developed Countries (LEDC). These are usually in level 2. When they start exporting it boosts them up to level 3. At which point they rapidly rise up the ladder until they join the MEDC’s. Producing very little importing huge amounts of recourses to support there lifestyle. They now gain there money by providing services to other nations. IE finance.

Primary/secondary Industry previously located in these countries moves to other LEDC’s, and the process restarts. This will eventually mean that all nations reach stage 5. With huge amounts of Tertiary industry and very little production. This means that the nations will not be able to support them selves, as they will not get the materials they need, coal, oil, food, computers etc.

The global economy will crash and all countries will return to the level of stage 1-2. This is the inevitable failure the modern economic systems.

You may think what has this got to do with capitalism. Well capitalism is the catalyst for this reaction. Corporations are driven to gain profits to please the share holders. This means they attempt to find the cheapest labour possible. Stage 5 nations have high wages to support the stage 5 lifestyle. So the corporations use LEDC nations with low wages to cheaply produce the products and materials which support the stage 5. This of course boosts the economies of the LEDC’s eventually making them MEDC’s at stage 5.

This is a vicious circle, and proves that capitalism WILL FAIL.

To survive this inevitable cycle, the catalyst which drives all these economic changes must be removed. Capitalism, if the huge corporate giants that move from nation to nation in search of cheep labour is removed then, the situation will be resolved. The LEDC’s would improve in the manner which Rostow predicted in his Model. To achieve this the rate of import and export must be heavily controlled, to stop the importation of goods from LEDC’s produced by these corporations, which are parasites in these under developed nations. Also workers and recourses in MEDC’s must be very highly controlled to maintain a stable level of recourses to fund the nation.

I am thinking of making a few corrections to it at some point, as I belive that my conclusion could do with a little more depth.

[peaccenicked]

In Marx's mind capitalism and waste where as inseparate as Laurel and Hardy. if such a sentence can be made.

this web page might be helpful
http://mailman.lbo-talk.org/1998/1998-Octo...ber/008144.html (http://mailman.lbo-talk.org/1998/1998-October/008144.html)

[monkeydust]

Capitalists would also argue that their system creates efficient products, simply because the better things are , the more people will buy it and the more cash the producers will get, this like many arguments in favour of capitalism is incredibly basic and has lots of holes.

When production is motivated by profit, I would argue that corners will be cut to save money creating inneficient products; whats more things aren't built to last there would be no point. What this leads to is a wasteful society, after all its cheaper to throw bury than to recycle, in many cases it is not in the interest of capitalists to be efficient with resources.

[eyedrop]

I can take an recent example from my town: The state sells out the buss(monopoly) lines to a private company.
The company discovers that there are so many thats cheats on the buss Monthly-cards. (you pay and then drive free for one month)
To stop this they effectivises the busses with some fancy new digital machines and cards.
You would think that the effectivising would serve us costumers with lower prises, since none of the card-cheaters would ride for free.
As it shows up the prises go up, because the cost of the new machines were larger than the loss caused by the cheaters.
Why did they apply the effectivisation when it cost so much more than the loss? (10 % raise in prise)
As an even more irritating add on the new machines takes forever to read your card, so now the buss lines from school takes twise the time to load, and all the busses comes out of order so I never reach the buss home.


Personally I don't se the effictivisasion in this act only the waste for all parts. (except the buss company that now has a larger pot to take their 20 % profit from)

I really believe that capitalism is not the most efficient way to run thing (especially by privatisation).
You have to remember that in everything of clothes you buy, 98 % of your money, (quessing) is used on the marketing and distribution of the goods. cant be much more than one or 2 % that is used the pay for the work labour and the raw wares. (poor 3. world countries)

[Hoppe]

Come on guys, you can do better than that.

I, as a capitalist, have to agree with the topicstarter that in an ideal world a planned economy would be superiour to a capitalist economy (oh no:lol: ).

That said, in the real world things look a bit different. Though I certainly am no expert on this subject, a planned economy cannot work and we are therefor "doomed" to capitalism. Various economist after that have stated that they hoped that a planned economy would be as efficient as a capitalist one.

Nevertheless, the claim that capitalism is inefficient based on the claim that it is ridicoulous to have 3 cars, 4 tv's and 8 kids will not really help you in your debate, except if you want to talk about morality instead of economics. If you want some economic papers, PM me and I can provide you some.

[IHP]

Why is it ineffecient?

Basically, capitalism by it's own nature is anti-democratic. It consolidates power in the hands of the few.

[Saint-Just]

Originally posted by [email protected] 21 2003, 10:01 PM
Come on guys, you can do better than that.

I, as a capitalist, have to agree with the topicstarter that in an ideal world a planned economy would be superiour to a capitalist economy (oh no:lol: ).

That said, in the real world things look a bit different. Though I certainly am no expert on this subject, a planned economy cannot work and we are therefor "doomed" to capitalism. Various economist after that have stated that they hoped that a planned economy would be as efficient as a capitalist one.

Nevertheless, the claim that capitalism is inefficient based on the claim that it is ridicoulous to have 3 cars, 4 tv's and 8 kids will not really help you in your debate, except if you want to talk about morality instead of economics. If you want some economic papers, PM me and I can provide you some.
There are many economic theories. It is often said that socialism provides good short term growth, but the free market provides good long term growth. Not suprisingly the study of economics is now dominated by free market thinkers, so the accepted ideas are that the free market is better. If you had studied economics in the USSR or Eastern Block you would have been learning about economic planning.

Stalin said that planned economies could always achieve better growth because they have greater control over investment. It is economically positive that investment in capital goods (i.e. machinery etc.) means greater capacity for production in the future whilst short-term consumption means more consumer goods in the present but smaller capacity for production in the future. And, the aim of corporations in a capitalist economy is generally to make as much profit as possible within the next 5-10 years. Particularly when management is coming in for only a short time to make vast profits and then leave for their next venture and of course shareholders who will profit and then sell soon after.

[Bradyman]

Here is another reason why it is inefficent.

When a new discovery is found or created, individual companies can patent or copyright the idea so that they have complete control over the technology. Thus only a select few people can engineer the discovery, whereas under a socialistic society information would circulate through everyone because two minds are far better than one.

[redstar2000]

Though I certainly am no expert on this subject, a planned economy cannot work and we are therefore "doomed" to capitalism.

I'm "no expert" either, to be sure, but I always chuckle when I read this kind of argument.

As I recall reading, Cuba is the 72nd largest planned economy in the world...the other 71 are huge multi-national corporations.

Whenever intelligent humans have the opportunity, they plan...on the presumption that any plan is better than no plan.

I don't see how capitalism is "the best we can ever do" when it involves supporting a parasitic class at obscene levels of wealth. How can that possibly be "efficient"?

http://anarchist-action.org/forums/images/smiles/redstar.gif

The RedStar2000 Papers (http://www.anarchist-action.org/marxists/redstar2000/)
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