Reisman's attack on socialism

[benhur]

His book "Capitalism: A treatise on economics" attacks socialism. Online version is available, and he puts forth pretty compelling arguments.

Have others read this book, and what do people think of the arguments he presents, especially when he says competition (which capitalism allows) would reduce prices and that would benefit the consumers (who're invariably workers)?

He also says resources are infinite, which people here deny.

[Bilan]

Anyone who says resources are infinite is totally delusional, and doesn't understand the complexities of resource management in any form.

So I'm always of the persuasion that this guy is full of himself.

Furthermore, the reduction in "prices" has to be matched by other things:
Prices of commodities are not "something" in themselves: they have to be understood with the general "living wage" of people. Naturally, a commodities price is not created through nothing - a commodity (not a single one) contains elements of things involved in its production (Labour time, resources [e.g. metals - for a drink for example] and so on).
The lowering of a price because of a competition does not mean that wages stay at the same level, and that the living wage will increase. On the contrary, competition is likely to drive wages down because the objective of capitalist competition is not to just have the cheapest product - it is to have the biggest turn over of profit.

And that's all I can be bothered saying.

[Die Neue Zeit]

^^^ I think tha author is confused (unless the OP made a typo). The usual argument against socialism is that resources are FINITE ("no free lunch").

[Schrödinger's Cat]

Providing a link in this thread would help.

[benhur]

Thanks, I dont think I have enough posts to provide links, but if one types Reisman or "Capitalism: A treatise on economics" on google, one should get the page.

There's one thing he says which is intriguing. He says monetary system is the best there is, because if products are exchanged for other products (after abolishing monetary system), then that will give birth to other problems. For instance, the availability or the lack of the said product is one problem. Second, it's impossible to determine exchange value, he gives the instance of a man in the desert exchanging diamonds for water. But normally, water is hardly a thing to be exchanged with diamonds. On this basis, he argues that money solves this problem.

This is the most important point of his book, because he attacks the very basis of socialism by attacking the concept of a moneyless society.

[Schrödinger's Cat]

Only certain expressions of socialism go without money, rendering that point moot on grounds of consistency. I'm already unimpressed.


Second, it's impossible to determine exchange value, he gives the instance of a man in the desert exchanging diamonds for water. But normally, water is hardly a thing to be exchanged with diamonds.Stop for a minute and think about how preposterous and obvious this statement is. The author is making an argument against a bogeyman, not socialism. We don't believe in objective values that never fluctuate. Let's look at an alternative to money - energy accounting - where items 'cost' approximately the amount of energy which went into producing it, and where people receive approximately (if not entirely) the same amount of energy credits - which corresponds roughly to the amount of energy which went into the economy for a certain period of time. If a nasty bug wipes out a fifth of all apples in production, the community identifies a problem, and workers respond by implementing a relative increase of 'value' at the sale/transfer stage without increasing the energy credit dividend.


But normally, water is hardly a thing to be exchanged with diamonds. On this basis, he argues that money solves this problem.Solves what problem? If the two of us are in a desert, you owning diamonds and I water, our exchange would not be through money. We would be bartering. I might add in this scenario the very system of monetary exchange breaks down anyway. Why would I want diamonds? I'm either stupendously naive, or I possess more water than what I'm exchanging for. Unless we're both civil people, it's going to end up with problems. Money, like everything else, becomes near useless in dire scarcity.

The author must not be aware of the novel and simple idea that you can mimic money. In the case of energy accounting you're actually improving on it. Profit and the closure of information prevents the consumer from getting a true understanding of the value of a commodity. For example, the average t-shirt is marked up 150-250%. Another example would be this book we're talking about: it was costing close to $100 on a website I accidentally came across. As a small publisher I can tell you no book that size should be worth over $50.

Let's think about practical situations. In the mass market, individual values are rarely, rarely judged through price. I may think the ipod is more important than a home, while most rational people do not, but the market is going to give us an ipod for the same price.

I'll be reading over this with time. Apparently the Austrian school is slobbering it up, if Amazon is any indicator. Typical.

I should really get around to writing my book one day.

[BobKKKindle$]

especially when he says competition (which capitalism allows) would reduce prices and that would benefit the consumers

The idea that capitalism is based on competition, or that competition is a central feature of capitalism, is wrong. As capitalism develops the level of competition actually decreases because more efficient firms are able to purchase the assets of smaller firms (especially when the firms which are being bought up are faced with the threat of bankruptcy) and so increase their market share. Once these dominant firms have reached a position of strength they will begin to use pricing strategies to prevent new firms from entering the market (for example, lowering their prices below the cost of production for a limited time to stop other firms from being able to compete) and so will be able to maintain their market power. This process, combined with mergers between firms of a similar size, eventually leads to the formation of markets which are dominated by a small number of immense firms which operate in multiple industries. These firms will then take advantage of their position to increase their prices above the actual value of their goods, which will allow these firms to attain a second source of profit, in addition to the exploitation of labour.

[Nothing Human Is Alien]

Sorry, I don't have enough time right now to properly respond, but:


if products are exchanged for other products

That's a barter system, not socialism or communism.