Capitalism works in spite of welfare.
Capitalism works in spite of welfare.
You have it backwards. The welfare state can only survive thanks to capitalism.
Tatar... wrote:
The point is if airlines hadn't been given tax payer money to keep them going through the deeper part of the pandemic then there would not be an airline industry anymore.
Lol. Sure.
OozmaKappa wrote:
You have it backwards. The welfare state can only survive thanks to capitalism.
I agree, but I think it’s a symbiotic relationship too. My main premise/OP had the early 1900s in mind, when market concentration across key industries was very high, as was inequality in the context of a rentier economy. When the Great Depression hit, pessimism about capitalism was growing rapidly. The Keynesian solutions and activist government policies lambasted by the right today were broadly thought of as conservative solutions to the economic crisis at the time in that they strengthened the foundation and durability of capitalism. Keynes himself said there was no fundamental problem with capitalism, it was simply an episode of “magneto trouble” the economy was in during recessions
If you’re genuinely curious I could talk your head off about this for hours but the only thing I’ll add is that we don’t now or have ever lived in a truly capitalist society/economy. One was never existed.
No. People who argue for a welfare state usually do so for moral reasons. Capitalism would thrive without a welfare state.
Tatar... wrote:
Josh439 wrote:
Airlines had so little cash saved because they knew they would be bailed out. That's not capitalism.
Yes but they know how reliant the rest of the economy is on them and know the rest of the economy will bail them out because them failing is worse for everyone.
It's like if the private water industry was in trouble for some reason we're obviously going to fund them because the alternative is we don't have clean water.
If the airlines weren't bailed out they would just declare bankruptcy and start over again. Prices might go up a little, but it's not like the airplanes, airports, pilots and crew would all disappear. There are hundreds of airlines, it's not a natural monopoly like public utilities.
No.
The government has created a version of crony capitalism that is nothing like free-market Capitalism is supposed to be. You only think they are needed because the government has so corrupted the system that you do not understand what Capitalism is.
There are only 2 monopolies, not government-backed that have survived generations in the free market. One is the NYSE which eventually got government backing status but was a totally unregulated monopoly for almost 80 years. The other is Debeers diamond company and that may not be a good example because there may be a tad bit of corruption there. When you look at the monopolies the trustbusters broke up, A) they had a very short life, B) they were already losing significant market share before the government got to them. In fact in many cases by the time they were broken up they had already lost their monopoly.
Hardloper wrote:
Tatar... wrote:
Yes but they know how reliant the rest of the economy is on them and know the rest of the economy will bail them out because them failing is worse for everyone.
It's like if the private water industry was in trouble for some reason we're obviously going to fund them because the alternative is we don't have clean water.
If the airlines weren't bailed out they would just declare bankruptcy and start over again. Prices might go up a little, but it's not like the airplanes, airports, pilots and crew would all disappear. There are hundreds of airlines, it's not a natural monopoly like public utilities.
This right here is exactly what people get wrong about capitalism. The ability to declare bankruptcy is the definition of a well fare state. The airline industry would consist of 1 airline at this point without corporate welfare existing if there would even be an airline industry.
There is not one industry that would exist without government subsidies
josh1988 wrote:
This right here is exactly what people get wrong about capitalism. The ability to declare bankruptcy is the definition of a well fare state.
Lulz. Okay then.
Hardloper wrote:
josh1988 wrote:
This right here is exactly what people get wrong about capitalism. The ability to declare bankruptcy is the definition of a well fare state.
Lulz. Okay then.
I’m not sure what lulz is.
troll_69 wrote:
Yes.
Capitalism has a tendency to concentrate wealth and income, and lead to its own destabilization. This is true even in the absence of cronyism or corruption in the public sector permitting the development of monopolies or other market failures in the first place. Throw in some income security and social insurance, and you can continue to reap the wealth-generating effects of capitalism.
No. We need to share the money. Take it from the rich (oprah, bezos) and give it to the deserving! ENOUGH!
sha racism wrote:
troll_69 wrote:
Yes.
Capitalism has a tendency to concentrate wealth and income, and lead to its own destabilization. This is true even in the absence of cronyism or corruption in the public sector permitting the development of monopolies or other market failures in the first place. Throw in some income security and social insurance, and you can continue to reap the wealth-generating effects of capitalism.
No. We need to share the money. Take it from the rich (oprah, bezos) and give it to the deserving! ENOUGH!
Interesting example because the two people you mentioned have benefited substantially from our welfare state…
Welfare state is a loaded term. If welfare state means a mass of government agencies and programs, then it is likely not necessary for the long-term survival of capitalism. If welfare state means some level of income redistribution, then yes it is necessary. Adam Smith himself believed that there needs to be mechanisms in place for some level of income redistribution. So did Hayek.
Few people disagree with the need for some level of redistribution and safety net. The debate is about how much, and how it is done.
troll_69 wrote:
Yes.
Capitalism has a tendency to concentrate wealth and income, and lead to its own destabilization. This is true even in the absence of cronyism or corruption in the public sector permitting the development of monopolies or other market failures in the first place. Throw in some income security and social insurance, and you can continue to reap the wealth-generating effects of capitalism.
Unregulated capitalism will fail if the government doesn't step in and break up monopolies. If fair entrance to the market is maintained, it will thrive and make everyone rich who is willing to work.
Socialism never works . When people can vote for benefits without having to contribute, it will die.
You think welfare is the solution we use to combat white collar crime? No. That's regulation and law.
This is a rather badly worded argument, and one that doesn't make a whole lot of sense.
This.
The reality is that "capitalism vs. socialism vs. communism" debates are almost completely academic. The gist of what many people are pointing out here regarding bailouts, big business subsidies, govt. spending as a percentage of the economy, etc. is that the "free market" in the United States is largely a myth.
Both capitalism and communism sound cool when you're smoking weed in your dorm, but there really aren't any case studies of either working effectively in its purest form. We're all just bumbling along and doing what we can with what we've got.
800 dude wrote:
troll_69 wrote:
Yes.
Capitalism has a tendency to concentrate wealth and income, and lead to its own destabilization. This is true even in the absence of cronyism or corruption in the public sector permitting the development of monopolies or other market failures in the first place. Throw in some income security and social insurance, and you can continue to reap the wealth-generating effects of capitalism.
What's your evidence? What do you mean by "destabilization"? What do you mean by "concentration"?
While I think it's fairly well understood that economic winners tend to use the political process to entrench their position in anticompetitive ways, your exclusion of "cronyism or corruption in the public sector" seems to suggest some other kind of destabilization. Do you mean a Marxist revolution? If so, that's not a hypothesis supported by evidence, as there's never been a proletariat revolution against capital as Marx envisioned. Which of course doesn't mean the hypothesis is wrong, merely that it's unproven. The closest thing is probably the French revolution. That could be called a proletariat revolution, but it was certainly not a revolt against capital.
The term "concentrate" seems to imply a limited supply of wealth and income that is being reallocated to certain individuals or institutions. But capitalist wealth is primarily premised on economic growth, not on redistribution to those at the top. Material standards of living at every strata of society continue to improve.
To the extent that capitalism leaves classes of society behind, it is less about material inequality and more about dignity, autonomy, and finding meaning in one's life. But I think if we expect an economic system to provide meaning to our lives, we're asking too much, and the problem isn't solved by more income. Ask the average lawyer at a top law firm (where depression and alcoholism are rampant) if they fill fulfilled because they're among the highest paid professionals in the world.
Also, even though it's true that capitalism leads to wealth and income inequality, so far in human history, capitalism appears to lead to less inequality than any other system people have ever tried (barring stone-age tribal societies).
None of this is to suggest that we shouldn't redistribute income or have a welfare state. Just that it's questionable whether capitalism requires it.
the password is password wrote:
In a lot cases, capital survives because it’s truly subsidized capitalism.
Imagine how many “capitalist” airlines would’ve gone out of business during covid. Imagine how many more banks would have gone out of business during the Great Recession. Imagine how many car companies would’ve gone bankrupt without Obama’s car program.
Bailouts the rich.
Why is the failure of a business evidence that capitalism doesn't work? You do understand the entire premise of capitalism is that businesses are constantly failing, right? Bankruptcy is part of that process. The government propping up failing companies is actually interfering with capitalism.
Now, interference might be justified in some instances. For instance, I think it was absolutely the right call to bail out the banks, as failing to do so would've caused far worse economic harm. But I think that afterwards, we should've broken up the banks and imposed a size limit on financial institutions. There is strong evidence that banks can maximize economies of scale at far, far smaller sizes. There is also evidence that the reason banks have merged to such large sizes is specifically so that they can offload their risk to the public. Because their failure would endanger the financial system, they can pursue higher profits at higher risk, knowing that the public will always bail them out. A simple limit on the size of banks would've been a far more effective reform than Dodd-Frank, which in many ways exacerbated the problem. Compliance is so complicated that it requires very highly compensated lawyers, which provides an advantage to the entrenched market leaders. This is commonly misunderstood: Big business LOVES regulation because it protects them from nascent competitors.
Man you have a long, long ways to go my friend. You think you know everything, and you're not even close. I'm not going to bother explaining all of the ways this is wrong, because it would take pages and pages. And anyways, what you really need is a lot more knowledge, not a point by point refutation.