Why capitalism worked and communism didn't ...

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Capitalism doesn't involve slavery, at least unless slavery is legal in said capitalist system or something. However, legally slavery is illegal and the only people that are slaves are only such because of criminality or governmental problems. Capitalism is not responsible for the flawed governments of 3rd world nations and I would not really blame capitalism for slavery either, I would blame the Russian mafia or some other force as governments try to prevent such from occuring. I think that if one compares the merits of capitalism to other economic systems then capitalism becomes a clear winner. The only thing about capitalism is that it needs some supervision but it is better than communism and feudalism and can definitely be considered the free-est system that has arisen.

I really do not see the need to buy fast food nation as it is very expensive and I really do not trust such books. There seems to be a modern tendency towards propaganda so I really tend to avoid books unless they have been authored by somebody with a doctorate and is an expert or if the book seems sort of politically neutral yet interesting. The book in question is known to be sort of controversial which is sort of a turn-off. I got sort of sick of controversy and feel a need to avoid propaganda and biased sources and such after I saw that movie Fahrenheit 9/11 which is a stitched together mess of conspiracies. Also, I already have enough summer reading and know of books that are cheaper and more trustable.


You don't know how economies work do you? There is no difficulty with labor markets that requires warfare. The division of the world into countries occured long before the modern economy did and really is a problem for capitalists as it creates problems for them, after all, most capitalists want free trade and this is a problem that is created by division of nations. If there was no division then there would be no trade dispute. Also, exploitation is really a problem with local governments not with capitalism. These people may be paid less in comparison to our money and it is worth more to them, the wages offered by these companies is often higher than what they would get otherwise and freer trade is actually a source of much economic growth for these nations. The reason why South Korea's economy has done so well in the past was trade with other nations and this is true about other countries as well. Freedom of trade allows for these countries to catch up to the West and as such they have relatively large growth rates. Also, it is noted by economists that Mexico has benefitted from NAFTA. In fact, really, less benefit is gained by the greater nation from free trade than the lesser nation to tell the truth, in NAFTA, the US's GDP grew but not very significantly while Mexico's went up about 4% if I remember correctly. A lack of economic freedom is the big problem with 3rd world countries, not the threat of economic freedom. There is no pyramid, there is only trade where both sides give willingly and receive and without trade everyone suffers from the poorest to the richest.

i'm not sure. note, that i personally wouldn't use the term "ruling classes", but i do think there is quite a disparity between the mega rich and poor. those who use the term i believe are talking about a very small minority of very rich people, billionaire and suchlike.

would this be because rich people are intelligent and resourceful and poor people are stupid?

I'm sure paris hilton qualifies right?? hahahaha... lol.

No, not at all. I am not rich. I actually am rather poor, but at one point I owned my own business. While fate and circumstance has rendered me destitute, what I learned creating my business will stay with me through out my life.

What I did was pretty narrow focus, but as I start again, my skills will become more rounded. When I fail, the lessons learned will improve my chances the next time. I will fail. But that wont stop me.

Its very much what we Aspies do. Blunder in, make a mistake, analyse, create a response rule, try again. Just keep at it, all pig headed as hell.

The point is, money.. finances.. are one of the most important skills ever, and they dont even teach it at school. The average person wouldnt know what to do with a million dollars, and it would be gone so fast. I wouldnt know what to do with a million.

But I did turn 5000 into 20 000. And I know I can do it again. Nothing will ever stop me.

Shouldn´t the title be: Why capatilism worked.....up until now.

I mean, you could post something about how the third reich was better than previous governments up until the second WW, not that I´m equating Capitilism to Facism in any way.

Democracy and Dictatorship are getting mixed in with Private vs Public Ownership.

The fact of the matter is that most democratic nations historically have had some very strong Socialist elements. If you look at the Declaration of Independence (the American one), it sounds pretty socialist. The founder fathers wheren't just Liberals, they where radical ones.


Capitalism that is completely unrestricted by government tends to drive the nation towards facism. (In no small part to the power that business holds with money)

But then again, in "Communist" States (they are probably not as Marx had envisioned) you end up with a very similar situation. A small group of people with a lot of control over the resources, who use that power to force their will on the populace and get whatever they want.


So yeah, I look at Capitalism as the guy who (literally) wrote the book on it (Adam Smith) does. It's alright to have business, but it needs some limits and guidelines.


Canada is one of the best countries to live in, because we are one of the most free nations in the world. Mind you things seem to be getting worse, and I think it's in no small part to the American values we're flooded with. And by that I mostly mean the anger and extremely confrontational attitudes (other then that they're pretty frick'n similar.)

I don't neccesarily mean in terms of the law either. Because you know, we have decriminalized marijuana and same sex marriages are legally recognized (Let's keep debate about these out of this thread, if you don't like them, we can have a discussion/flame war on a different one ). But then Stephen Harper is in right now so he could come up with crazy things. Granted it's a minority government but hey, politics is crazy. Canada's in some ways more so then many nations (for the most part less millitant and more view points actually recognized but still a lot of yelling)

Many of the richest people are self-made to some extent. Bill Gates earned most of that billion as well as Warren Buffett, they did not inherit a billion dollars. One can argue that they may have had special advantages as the Gates family and the Buffett family were not poor but all that shows is that families can be 2 generations away from being billionaires which still does not suggest a ruling class.

Yeah, I suppose that would be more correct. It is true that Facism was more successful during the great depression. I think the reason why it wasn't done was convenience.


Hmm.... it doesn't really sound that socialist to me, it sounds more libertarian. I mean a few of the complaints were about taxes and trade restriction which aren't so much socialist issues as they are with people who don't like big government. Not only that, but our first government, the articles of confederation, was so weak due to fear of governmental power. I mean, really, our first political parties were centered around the issue of governmental power. So, unless you mean classical liberal(libertarian) in which case I apologize for finding issue, I really tend to think that they were not socialists only a good amount of libertarians and maybe some conservatives(Hamilton).

Yeah, really though, few people support complete laissez-faire, they know that doing so would create all sorts of problems because there are always issues of corporate wrongs, the largest of which that I can think of is the nature of the meat industry in the past and the benefits that were given to it by regulation.

Yeah ... And what if you don't own much? Say that you live in an apartment? The less you own, the less chances of getting a loan. They actually have a name for this. It's called redlining. They have even nitpicked certain districts, mostly underprivileged types, because they tend to default on their loans more. This is what the Credit Reinvestment Act (CRA) is supposed to help weed out, but we're all fit with a class of rulers who would probably bring back debtors prisons if they could get away with it. It's just that the ruling class in America hasn't yet found a good mechanism to make 'debtors prison' sound like a viable option. They seem to be getting there, though. Hell, Reagan managed to convince many that most people on welfare drove around in Cadillacs. They have seemed to even manage to convince a lot of people that most people on disability are simply people who don't want to work. Yet, the real people who are suffering under harsh economic discipline conditions are completely ignored. It's those that managed to drive around in Cadillacs who get the recognition, which were probably not even that many. If the ruling class in America can find a way to convince the people that the underprivileged is a true threat to our ways of existence, then they'll bring back debtors prisons in a heartbeat. In America, you have to find ways to whip up public support, and you do it using scapegoats and economic deception.

- Ray M -

It can be safely said that the United States does operate on a caste system. It's probably more accurate to say that it is a system of classes, however. The middle class has greatly diminished in the past many years, which greatly expanded the lower classes and significantly reduced the upper class.

Entrepreneurship does not equal innovation. Linux was innovative, and yet that was created outside of the capitalist-driven market. The same was true of Napster, and look what capitalism did to that. These sorts of things were innovations that were created not from entrepreneurship but just from people with ideas. Even Gillette, the razor, was created years ago by a self-proclaimed socialist.

We send people to prisons and mislead our population, too, but in America, we have convinced much of the public that everyone in a free-market prison belongs there. Our economic discipline efforts even push people to extremes. Take John Q, the movie about the person who took a hospital hostage. Like Russia sent people to the gulag, we can send children to prison just for drugs. Yet, we have not yet reached the audacity to do that for tobacco. Why is pot illegal, then? It surely isn't about health, because tobacco is very legal, despite all the laws being railed against it as of the current time. But, smoke marijuana, and that's another story. Most of the prison population are drug offenders. Yes ... we place people in prison, too, but we are more innovative in how we do it. We find ingenious ways to convince the people that specific people are a threat. Druggies are a threat, so the CIA helped bring drugs into this country during the 1960s as a mechanism to shut down political opposition. That's not to account for the hostility that is more and more emerging in the American culture. We are a growing culture of angry and selfish bastards. We are becoming that way because we see our leaders as role models. We are becoming what we see and what we hear.

That teacher who said that most people could have a million dollars just by saving money is misinformed. Most people don't spend it on fancy cars. That's a myth. How many fancy cars do you see on the road? Most cars are economical. Most people spend it on things they may want, sure. But most advertising is geared towards the upper middle classes. Go to a city and hear about a kid who just shot another for their shoes. I doubt that teacher will then say that kid spent money on fancy cars. I wonder if she would even say that that kid probably had parents who had trouble financially, because that's usually the case with kids who join gangs, since they tend to look for belonging in a society that doesn't care about families, other than pressing phobia about family values.

- Ray M -

Wow, alot of Canadians here. UP CANADA!

Capitalism now has a new threat, the world itself.
We don't need to change our system but we do need to do something about the environment.

Some ideas-
There are lots of logging areas that are "public land" and the government can declare what areas are to be clear cut. Instead lets have many private areas. The companies that buy that land will have to deal with the consequences if they cut all the trees.

I am sure there are alot more.

It is very misleading to say that the USA is a caste system. Caste system usually means a system of hereditary and endogamous social classes, usually the result of perverse religious beliefs. The USA may have a class system, but it is not really fair to say that it is hereditary and endogamous, therefore it does not fit the usual definition of a caste system.

Here is more information about the caste system in India, so you can see how different it is to the USA and how much better it is in the USA:
http://memory.loc.gov/cgi-bin/query/r?frd/cstdy:@field(DOCID+in0090)

In a caste system, you are born into a caste, and you are required to stay in that caste for life, regardless of anything you achieve. Whereas in the USA, you can work your way up to a higher class if you are smart, persistent, hard-working etc, and plenty of people have done so.



Linux? Innovative? Wha...?? Linux is the EPITOME of copying someone elses ideas and making them your own. Now, I am NOT saying Linux is wrong to do this, but it should be acknowledged that it does do this.

Why do you think Linux is called Linux? It is a combination of "Linus" (first name of the original author) plus "Unix" (an operating system existing prior to Linux). Linux is a clone/derivative of Unix. Therefore, Linux is the epitome of copying someone elses ideas.

Again, I am not criticizing Linux here, just saying it is incorrect to think that Linux is innovative. Cloning Unix is hardly a good example of being innovative. Linux also incorporates many ideas copied from Microsoft Windows. The open source community has embraced the idea of copying the ideas of others -- for example look at the WINE and MONO projects, these are unashamedly brazen copies/adaptations of Microsoft technology. Not saying it is wrong, just saying what it is.

Quite so. You speak no un-truths! I myself rent. How-ever, in western society, paying your bills in a timely matter enhances your base credit rating. You are more likely to get a loan for being a good wage slave.

The other thing is that advertising is HEAVILY aimed at youth, not as you say. If you can train a young person to spend every red cent when they make 20k a year, they will continue to do so when they make 100k.

That is why you see "dont pay a cent for 36 months!" on furniture and other chattel. 36 months... 3 years.. they want you to pay for that sofa after college!

There is a whole mess of secondary reasons involving the economy, which, from what I hear, I dont understand! Suffice it to say that the most important factor is that money continue to circulate, and that it circulate as fast as possible. Maybe another time I will get into that.

The US doesn't have a caste system, somebody can technically work themselves all the way up from the very bottom if they have the skill and the will. I already posted my sources on those who have worked their way up to millionaire status, I did already post the source on how some small investments can allow somebody to reach millionaire status, I already posted my source on how education can allow somebody to achieve much much higher levels of income. I could even tell you that the starting salary for engineers and computer science bachelors degree holders is pretty close to $50,000 dollars a year with possibilities of higher salaries based upon high GPA, internships, etc and that 50,000 dollar salaries set one firmly in the middle class.(this is based upon the statistics at the Bureau of Labor) Business majors also tend to receive good salaries as well.
http://stats.bls.gov/search/ooh.asp?ct=OOH

I could even post that the number of millionaires has increased in recent years at an increasing rate which once again disproves the claims of Karl Marx in "The Communist Manifesto". The information on that can be found here.
http://money.cnn.com/2004/11/16/pf/mill ... ouseholds/

Capitalism has proven itself a very good system. Many economists today do not focus on new economic systems but rather ways to get the most out of capitalism.


All societies have innovation, even with the most wrong-headed economy one will still have innovation. You even forgot to mention that one of the best assault rifles ever designed was designed by a communist who built it out of the love of his system. I am sure that most are familiar with the AK-47 and its continued use today. However, this does not mean that a communistic or socialistic system will have as much ability to innovate and seek efficiency as a capitalist system. One can look at the Kitchen debate between Khruschev and Nixon for that answer, sure the Communists built a rocket but that was all they built, capitalism in the same time built all sorts of consumer goods for the benefit of the common individual and still ended up beating the Soviet Union overall. The fact is that incentives drive the economy, if you look at the source I posted earlier on the millionaires you would see that many of them were just folks who saw a need for something and took advantage of this. Society benefited from their actions and they benefited from their actions. These 2 quotes below by Adam Smith reflect why capitalism works.

"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages."

"As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual value of society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it."

The first quote shows how self-interest guides societal action. People in all societies in all ages have sought their own advantage. This goes back to the actions of the Catholic leaders and the indulgences they sold, this goes back to the Romans as they conquered land for their economic gain, this goes back to the feudal lords and the power that they claimed over their serfs, this goes back to slavery and mankind. Self-interest has a long history in humanity and we need a system that acknowledges self-interest rather than one that ignores it.

The second quote shows how self-interest leads to the good of society and how entrepreneurship is good. People in seeking their best interest will seek the best way to use their property which is what an entrepreneur does. In doing so, entrepreneurs must also benefit the rest of society, in seeking his own good he pleases others who seek his services/goods and because of this ends up helping society the most. A central planner has no incentive to act as well and could never be so efficient as our entrepreneurs because of this and because of the negative impacts that bureacracy and other slow systems would have. The inefficiency of centrally planned societies is dealt with in economist Friedrich Hayek's book the Road to Serfdom. It is found for free on the internet in shortened form on a few websites(the whole thing costs money as you have to buy the book) I will leave a link to a comic though summing up the ideas(although reading the actual argument would be better, I just think that the comic is cool).
http://www.mises.org/TRTS.htm

I am sorry to argue using another's quotes like that but when describing the capitalist system there are few people better than Adam Smith and he could phrase it more eloquently than I ever could. I like comics so that is part of the reason I included it.

Take John Q again and recognize that there is economic scarcity and the right to one's own labor. Hearts are in high demand as are the talents of skilled doctors. How do we address these problems? Do we force all doctors into slavery? Do we force people to become doctors in order to bring up the supply? Do we kill people to take their hearts because we need more hearts? The answer to all of those questions is no. Even though John Q's kid may die, some other person will live. John Q of course cannot see this greater picture being that this is his kid but when we are dealing with the economics of life and death we need to realize that no matter what choice we make we will have a trade-off. Did you notice that it was only by luck that there was even a heart available to be used? That is a part of the scarcity problem. All societal systems will have problems, we are dealing with people and we are dealing with limited resources. No matter what we cannot make hearts poof out of this air and any measure that we would take would hurt other people. Let's just look at it this way, how would you decide in an economic system about who receives treatment between a highly skilled engineer and a 10 year old, assuming that only one person could be treated? With any change there will always be trade-offs anyway. The fact that you liked this movie is a part of the success of capitalism though which is funny if you think about it, this movie about how this man fell through the cracks was created by people who probably only did that in order to help their own finances.

Uh, drug based convictions and gulags are not really the same. They aren't even similar to be honest. Gulags were places where crazy soviet dictators threw random people and had them work themselves to the point of death. Illegal drug laws are based upon the fact that some of these drugs are horrible and horribly addictive, if the market ever let crack and heroin loose upon the population well, the results would be quite bad. Crack destroys people. Marijuana on the other hand is based upon bad history and really there are political groups that support its legalization and it is legal in many capitalist nations. Tobacco should be illegalized as it is one of the worst products on the market, it is poisonous and addictive, the reason it hasn't is not because of the "police state" but rather because of profit and because smokers like their tobacco. However, smoking is losing popularity because of its negative impact upon the health of individuals. Most drugs are not banned because of a repressive society but rather because of individuals who hate the drug, the Prohibition was not a result of corporations or corrupt politicians but rather Progressives who had the goal of reforming the system and making it better and less corrupt. I really don't know how the CIA brought in drugs during the 60's to attack political groups, in fact, I cannot find any information on what you speak of. Are you speaking of the hippie movement which was full of drug lovers but so wildly hated by those with political power and how LSD was studied and discarded by the CIA? I assure you that the CIA had very little to do with the spread of LSD, university professors did that and they were trying to find out for themselves the benefits of the drug and many believed that it was in fact beneficial. It was completely banned when the professors became crazy weirdoes who popularized the drug for youth populations as the professors themselves believed that the drug opened the door for spiritual truth. Other than that I cannot figure out what you are talking about and really that is not the CIA trying to suppress political dissent as hippies were one of the most annoying form of political dissent for leaders around that time frame.

Really, I do not know if anger is something that can be measured throughout time in the US, American hate groups have fallen compared to the past(although they are growing now due to insufficient political action about illegal immigration), duels are less societally acceptable, hatred over the outcome of the Civil War has come down a lot and most now accept the North as the rightful winner(we have had presidents in the past who romanticized the South), racism has diminished, I mean, really we have become more civilized and possibly even less hateful. The increase in selfishness is also something that cannot be measured. Business interests have always influenced US policy whether it was good for America or not, the high rates of tariffs throughout history is a sign of that as businesses wanted high tariffs to reduce foreign competition as well, businesses have corrupted the government in presidencies like the presidency of Warren Harding where a government official leased government land to an oil company in exchange for bribes. The US has also been skeptical towards social spending for most of its history, a quote by US president Grover Cleveland demonstrates this "Though the people support the government; the government should not support the people.", public schooling was only a result of rich people who were afraid of stupid voters threatening their wealth, and US president Herbert Hoover shied away from hand-outs during the depression because of his belief that the government giving people money would be bad for them. Our history of social programs started with FDR who created many of them. It may be true that we are having more children outside of marriage but I cannot be certain as bastards have existed in all societies, founding father Ben Franklin even had a bastard son William Franklin who chose to be a loyalist in the revolutionary war and founding father Alexander Hamilton was a bastard (and given his beliefs you would probably consider him a bastard on the personality count as well). I would say that conservatives believe too that there is a rise in bastards and also believe that this could be solved by stressing abstinance and strengthening marriage. It really is hard to show how American nature has changed over the years, we have gotten less racist to be certain, and we have become more of a business society, however, I really cannot figure out much else.
Let me point out the fact that you are misreading what I said he said. He claimed that everyone in his classroom could have a million dollars. He showed us using mathematical models based upon amounts saved per year and invested with the rate being the market average. The reason why he said that we could all save up a million dollars was because everyone in that room was capable of getting a 50,000 dollar salary or higher by the age of 22(if you don't believe me see what I posted above) because everyone in that class had the ability to be engineers. With a salary of 50,000 one can save up a lot of money, in fact, his models really had quite modest saving levels for that amount of money. He even has us use smaller rates and later savings periods to show the effects. The reason why he said fancy car was to stress financial responsibility. There are good jobs out there for skilled employees, and in fact we seriously need more employees with math/science skill which was part of the reason why G. W. Bush was stressing math and science skills a while back, part of the reason being political self-interest as well.

Also by the way, I did post a model earlier about how one could use a small amount of money saved up at an early age to become a millionaire. Even if the model is imperfect more savings would make it better.

Last edited by Awesomelyglorious on 07 Jul 2006, 11:45 pm, edited 2 times in total.

Tax pollution. Pollution represents a negative externality where producers or consumers are not paying for the full impact of their actions and therefore a tax is needed to make them feel this impact. We could tax pollution and then funnel those taxes into environmentally friendly research or other eco-friendly causes, not only that, but of course, people buy less of something if it is more expensive. This is sort of a market solution to an environmental problem. In fact, high gas prices have actually slowed growth in US CO2 emissions.

http://www.eia.doe.gov/neic/press/press272.html