New report - Other looming debt crises

[3rdRock]

The basic rules of Capitalism are like gravity, something that works all the time, like it or not. Those that work harder and wiser produce more thus have more to sell and gain more wealth.

Somebody once said, "Capitalism has defeated communism. It is now well on its way to defeating democracy". Therein lies the truth.

[Little John]

The basic rules of Capitalism are like gravity, something that works all the time, like it or not. Those that work harder and wiser produce more thus have more to sell and gain more wealth.

Oh, you do make me laugh V with your childlike belief that capitalism is some kind of immutable part of nature with Newtonian-esque "rules". So utterly complete is your cultural indoctrination.

However, even taking such a quaint and childlike belief at face value, it is only "true" for about the first five minutes of any market being in existence. Once that five minutes are up, asynchronies that exist, for whatever reason, will simply and inevitably grow as night follows day for reasons that have nothing to do with "hard work" and "wise choices" and are simply the result of such asynchronies existing.

The only way that your mythical "free market" could exist for any length of time beyond those first five minutes is if:

a) such asynchronies (imperfect market information for some market participants, for example) do not exist

b) Given (a), that market participants that are out-competed politely move aside and do not attempt to rig in their favour by means of force.

But, of course, if (a) and (b) were the case, capitalism would cease to exist because it would become literally impossible for anyone to become significantly richer than anyone else for any significant period of time. An anarchist's wet dream (of both left and right persuasion), in other words. In short, the central paradox of your belief about capitalism is that if it were true, your capitalist market place could not exist!

However, (a) and/or (b) will never be the case. Once we accept the utter inevitability of that, if just comes down to how we deal with it. We could do what your dear leaders wish you little people to do and believe that they don't. In which case, social/political and, it would appear, even environmental collapse, will always eventually come. Or, we accept that inevitably and deliberately and overtly rig the market to benefit the greatest number of people the greatest amount of the time.

[johnhemming2]

Somebody once said, "Capitalism has defeated communism. It is now well on its way to defeating democracy". Therein lies the truth.

In the sense that you cannot pass a law to change the value of Pi.

[Little John]

Somebody once said, "Capitalism has defeated communism. It is now well on its way to defeating democracy". Therein lies the truth.

In the sense that you cannot pass a law to change the value of Pi.

Again, more bollocks based on an infantile underlying belief system that assumes capitalism to be somehow a part of a Newtonian structure of nature instead of the cultural construction that it is.

[johnhemming2]

Article 1 protocol 1 of the European Convention of Human Rights has private property as a human right. There may be some tribal societies that have more collective ownership systems as being in common. However, private ownership of the means of production, distribution and exchange is generally accepted as being in the interests of people as a whole.

That does not prevent some countries (eg North Korea) trying alternative approaches.

If you are going to suggest that the system should change you need to define how the alternative control systems should operate. The system may have flawed outcomes, but there need to be practical alternatives that make things for society as a whole - and particularly the poorer members of society - better.

[biffvernon]

Capitalism requires a flow of wealth from workers to capitalists, the interest of investments and loans.

That only works if the economy grows, so that the workers maintain their wealth or even have the hope of increasing it.

In a steady state or degrowth economy the transfer of wealth from worker to capitalist cannot be sustained for long.

To the extent that economic activity is not absolutely decoupled from resource consumption growth cannot be sustained indefinitely on a finite planet.

Global warming add an acute dimension, making climate change mitigation incompatible with capitalism. Contrariwise, capitalism requires global warming denial.

[johnhemming2]

Capitalism requires a flow of wealth from workers to capitalists, the interest of investments and loans.

Let us test this thesis.
(ignoring self-employment).

Employer A - sells a luxury yacht for £60m to a russian oligarch.
Materials costs are £15m, the employees are paid £5m the employer A makes a profit of £30. VAT is £10m.

Where is the flow of wealth from workers to capitalists?

The mistake is to believe that wealth cannot be created. (inter alia).

[biffvernon]

Capitalism requires a flow of wealth from workers to capitalists, the interest of investments and loans.

Let us test this thesis.
(ignoring self-employment).

Employer A - sells a luxury yacht for £60m to a russian oligarch.
Materials costs are £15m, the employees are paid £5m the employer A makes a profit of £30. VAT is £10m.

Where is the flow of wealth from workers to capitalists?

The mistake is to believe that wealth cannot be created. (inter alia).

Wealth is created by the action of work on energy and land. The wealth transfer from worker to capitalist lies not in the smart deal the shipbuilder makes with the foolish oligarch but with the interest payment on the loan the capitalist made to enable the construction of the shipyard.

[johnhemming2]

The wealth transfer from worker to capitalist ...

Where have the workers lost wealth. To have a transfer of wealth from the workers there has to be a transfer of wealth. Where is it?

Unless it is not the workers, but the employer who is losing wealth.

[peaceful_life]

The wealth transfer from worker to capitalist ...

Where have the workers lost wealth. To have a transfer of wealth from the workers there has to be a transfer of wealth. Where is it?

Unless it is not the workers, but the employer who is losing wealth.

This is a misunderstood premise of wealth .

Money is an agreed abstract unit of representation, it isn't wealth per se, it's merely a representative marker for energy and the real things (in tangible terms) which energy embodies. Wellbeing is wealth derived of energy.

However, within the context of this false premise, the wealth transfer/manipulation comes via the ownership of the means of extraction, production, transportation, through to point of sale, thus allowing a distorted accumulation of abstract units and access to more energy/wealth. Not so much a transfer, but certainly a monopoly, unless more of a cooperative worker owned system is exercised, but..... given that the vast majority of industrial financial activity is predicated on the destruction of real wealth in pursuit of the abstract, then it doesn't really matter, because we all lose.


If you have an acre of land and you fail to harness the incoming energy/wealth of that acre, by replenishing and building the soil/energy/wealth, then no matter how much of your yield you can sell at what ever price , you'll be in the process of bankruptcy, destitution, leading to collapse and until our baseline metrics are founded and measured on these realities..... we'll never have an economy.

[johnhemming2]

Let me test this thesis.

we'll never have an economy.

My view is that we have a flawed economy. ∴ reductio ad absurdum.

[peaceful_life]

Let me test this thesis.

we'll never have an economy.

My view is that we have a flawed economy. ∴ reductio ad absurdum.

Sure, it's just a very confined and limited view.

If it isn't ecological, then it isn't economical. What we have is a financial exchange system based on extraction, it isn't an economy.

[vtsnowedin]

The only way that your mythical "free market" could exist for any length of time beyond those first five minutes is if:

a) such asynchronies (imperfect market information for some market participants, for example) do not exist

b) Given (a), that market participants that are out-competed politely move aside and do not attempt to rig in their favour by means of force.

But, of course, if (a) and (b) were the case, capitalism would cease to exist because it would become literally impossible for anyone to become significantly richer than anyone else for any significant period of time. .

Nonsense! Your are assuming that all participants would work equally hard and have equal abilities. And while it sounds nice in the Declaration of independence. all men are not created equal nor do they apply equal effort to their problems.
There will always be winners and losers and cheaters but you cannot change the fact that increased effort and ability tends to produce better results. Anymore then you can change the value of pi.

[Little John]

The only way that your mythical "free market" could exist for any length of time beyond those first five minutes is if:

a) such asynchronies (imperfect market information for some market participants, for example) do not exist

b) Given (a), that market participants that are out-competed politely move aside and do not attempt to rig in their favour by means of force.

But, of course, if (a) and (b) were the case, capitalism would cease to exist because it would become literally impossible for anyone to become significantly richer than anyone else for any significant period of time. .

Nonsense! Your are assuming that all participants would work equally hard and have equal abilities. And while it sounds nice in the Declaration of independence. all men are not created equal nor do they apply equal effort to their problems.
There will always be winners and losers and cheaters but you cannot change the fact that increased effort and ability tends to produce better results. Anymore then you can change the value of pi.

Increased effort and ability produces better results if access to market information and market resources is the same for all market participants. For the reasons I have already cited, but which you have completely unsurprisingly failed to address, they do not have equal access to market information or resources. Unless you can unequivocally demonstrate that market access is equal for all participants, your contention is mere fantasy.

[johnhemming2]

Increased effort and ability produces better results if access to market information and market resources is the same for all market participants.

Even with unequal access to information and resources increased effort and ability produces better results given that everything else remains the same.

Information access today anyway is better more generally. Resources particularly natural resources give people a head start.