Why capitalism worked and communism didn't ...

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Ever wonder why capitalism worked and communism didn't?

Well, I can assure you the reasons have nothing to do with what they teach in economics or political textbooks.

Capitalism was created by a majority of right-wing types, for the most part. This meant that it was created by individuals who are more organized and extremely self-centered. Laissez-faire is probably the most extreme of the capitalist type. National socialism, as which was instituted in Germany, even had some elements of socialism, but was heavily based on the paranoid and organized strategies found in many right-wing types. Its use of socialist ideologies was generally used to create a labor class in which can be subscribed only to a German master race. Other than that, it was far from socialist.

Communism was crafted by a majority of left-wing types, for the most part. This meant that it was created by individuals who are more disorganized and not as self-centered, though possibly self-absorbed, but having much more compassion. The term socialism was used at one time to identify elements leading to a communist community, but it has since taken on meanings that have little to do with communism. All forms of socialism are leftist, but they are not all communist. Libertarian socialism, for example, is far less extreme than authoritarian socialism.

Both systems are techniques of economic, social and political control. So, what makes both systems bad? Well, because they don't take into account the needs of different individuals. Many left-brained types can't function well in a socialist economy, and many right-brained types can't function well in a capitalist economy. Therefore, I have just possibly defined the neurological definition of the term 'class,' as used in economic textbooks.

Communism fell because its creators were far more disorganized. That is why economic quotas were always off, and that is why there were always problems with creating enough to sustain their economy. Everything had to be rationed, but these individuals were always caught in the principle: "How do you get what everyone needs?"

Capitalism hasn't fallen because its creators were far more organized. Capitalism, however, is turning nation after nation into a police state. This is because of the paranoid tendencies of its creators. Capitalism has to find ways to manage the people whom do not fit well into their system, which are, for the most part, right-brained people. And some of these types are the ones who tend to lead protests against the capitalist system. These people whom attack capitalism are visionaries, to be blunt. You find very few different types of rightist structures, such as capitalism, but you can find lots of leftist structures ... syndicalism, anarchism, council communism, participatory economics, libertarian socialism, post-modernism, etc...

Leftists are pro-active and progressive, whereas Rightists are reactive and regressive. Rightists lack vision, because they can only think in terms of reactionary agendas, e.g. agendas that attack others. Some contemporary Leftists are said to do this, but that's only because the real visionaries are usually kept out of the system, leaving those who have Rightist leanings, such as President Clinton, but are still leftist, to enter.

The fact of the matter is that both of these systems are, for the most part, inherently bad. There just is no system that has been created to accomodate the needs of both types of people. Libertarian socialists may actually hold some answers to this, for they are more accepting of others, but until they can utilize the ideologies of both sides ... a good system can not be found.

- Ray M -

Aeturnus

More crap until your last paragraph, which sums it up most accurately.

There are not two types of people in the world. There are many types of people in the world. A utopian world would have a place for every person and make the most of their skills and energies, and provide for the needs of all, using the resources of the planet in a sustainable way. Ultimately this will mean limiting population and economic growth - because we don't have the resources to feed an infinite number of people.

In the not quite utopian world - there is a sort of oscillating balance - between left and right, between authoritarian rule and democracy or libertarian rule or anarchy. Between absolute control and absolute chaos. Unfortunately there are some nasty methods of population control that include mass starvation and war. We have the technology to do better than this but greedy short sighted or disorganised individuals prevent it.

Capitalism currently operates on greed. Greed does not take care of people, it exploits them. This is not sustainable on its own. Communism is quite a good idea but it is prone to failure because people get corrupted and greedy or lazy or ill. It also doesn't allow well for diversity or for people to find their best place in the world. Both systems are vulnerable to exploitation and corruption which leads to failure. (ever heard of "insider trading")

What I think would work best is multiple systems running together, networked and in parallel. People could choose to be in the system that works best for them, and change if it isn't working. Systems could be accountable to each other. A certain amout of inefficiency could be tolerated. We've nearly got this, it's called Countries, and the United Nations. What we haven't got is sustainability, tolerance. What we have got is far too much FUD (Fear Uncertainty and Doubt, deliberately increased with propaganda to sell newspapers and weapons and encourage control by submission in fearful populations). Trouble with this is rule by fear never works in the long run.

Oh dear...please go read some Ayn Rand!

http://en.wikipedia.org/wiki/Objectivist_philosophy

Communism is a way for a few so-called "leaders" to be capitalists while making everyone else slaves of these "leaders".

Capitalism has the same problem.

First thing is that rulers of communism are not capitalists they are tyrants. Capitalists make things work through innovation AKA entrepreneurship, communist leaders make things work by sending people to gulags and misleading their people. The second thing is that even if we are ruled by an all powerful capitalist class then they are definitely enlightened rulers as modern capitalist societies have a lot of freedom and prosperity for people that are not part of the upper class. After all, few societies have had such a large middle class as modern capitalist societies. Really though, I tend to doubt that there are "ruling classes" as there is no caste system, it is quite possible for many people if they have enough brains and talent to possess a million dollars or more through their savings and work, in fact, one of my teachers who taught advanced math and science told us that everyone in the room could possess a million dollars if we all just saved some money every year and did not waste it on fancy cars.

I disagree with all of this.

Success has little to do with capitalism or communism.

Look at Seden. Socialist. Great place. Great economy. Stable.. more taxes that i'd want to pay, but...

old USSR... very much the same. state runs everything, but the economy blew chunks... why?

Look at america. The premier society of market driven societies.

Here in Canada, we fit somewhere between USA and Sweden. Great economy. Better than Sweden, and far more exports that America.

look at France. Also market driven, but it does far more poorly.

Why?

Property law. If I tell my power company that I live at 100 RedWhite street, they can look me up, see that it really is my residence. It can be proven, through paper, that I live there, that I may be found there. This allows them to bill the property according to my power usage. If I fail to pay my bills, they can put a lien against my residence, which allows them legal leverage to recoup their money.

See, you cannot do this in a third world country, because the state prevents easy access to property ownership, and does not guarantee me permanent deed to my property.

Likewise, a goverment that cannot, or will not control extra legal entities like paramilitary groups, terrorists, or even gangs cannot protect me from loss of property caused by squatting or hostile invasion. Banks know this, and will not loan money, because they cannot protect themselves against loss.

Read this for a GREAT example. http://www.wrongplanet.net/asperger.htm ... ic&t=14840

In first world countries, state seizure of real estate assets requires that the owner recieve fair value for their land.

It doesnt matter whether or not is socialist or capitalist. What really matters is that the state, and society itself protects your claim, and protects the claims of debt against you.

Sweden, America, Canada, Britain, France, Australia... all these places have strong property laws. They might be state ownership in places, but codified rules exist that allow attachment of debt against legal addresses.

Russia isnt like that. Before the communists took over, people were serfs, and the royal family owned anything of value. During the days of the USSR, you couldnt borrow money against your apartment, because the state owned it(on behalf of all), and no one had legal recourse against the political body. You couldnt sue the government. Today, it is much the same, but only because force of law cannot protect your property against loss.

Sweden isnt like that.

Britain and France are interesting in that a good deal of the land is not owned, per se, but is what is called "lease hold", but still, its codified. You are the legal guardian of that land for the agreed period of time. You have rights, and others have rights too, and these can be held against your property.

America and Canada are remarkable. We have the strongest property laws of anyone, and wow! No big surprise, red hot economies. If I want to start a small business, I can march into a bank, ask for a loan, and they will ask me.. "what do you own?" to which I supply a list of my chattel, like my vehicle, my home, papers indicating 100 000 dollars of gold stock, the entire beatles song copyrights(Micheal Jackson, you must be regretting that yard sale!), and whatever.

Because my government recognises my rights and ownership of these things, and pledges to honor and protect the paperwork that proves it.. the bank agrees to lend me money to start my business, whatever that may be. In the event that I cannot pay them back, the government also pledges to help them claim and seize my assets.

Some would call this the heart of capitalism. It isnt. It is the heart of a free society. And it is the premier reason that the western countries beat the third world.

So dont blame the west, and dont blame America. It doesnt matter that we change regimes every 4 or 5 years. We are assured that the next goverment will honor our legal agreements. This just isnt true in the third world. Craft for your people a safe, stable persistant society and government, and you too can be envied the world over. You too can be rich.

Communism and Capitalism have nothing to do with it.

Awesomelyglorious

I recommend you read "fast food nation" by Eric Schlosser, if you think capitalism doesn't involve slavery.

For everyone else who thinks they have nothing to hide so it's ok if the government has access to all your stuff, read
"Staziland" by Anna Funder - it's about East Germany before the fall of the wall.
Its about why your government should not be allowed to read your emails or bank transactions. Because - power corrupts, and if you don't have a plan for managing the corruption itself, then all systems fail.

That is not true at all. I do not know how you can think that. I said that in Communism, there are a **A FEW** so-called "leaders", and everyone else is slave to them. However in Capitalism, there are **millions** of genuine leaders (business owners). So it is completely wrong to say that Capitalism has the same problem -- a few versus millions, that is completely different!

Furthermore, in Communism you are forced to work for the small group of "leaders", whereas in Capitalism you can choose who you want to work for (and there are many choices) or you can work for yourself if you wish.

Last edited by emp on 30 Jun 2006, 3:06 am, edited 1 time in total.

Only the countries with any kind of power will win.. you have no idea how economies really function do you? They function in a pyramid network type structure, one nations economy sits on top of anothers, and so on. This is why wars and division of the world into countries is *necessary* to create new labour markets wtih radicually differently valued currency, so one populace gets exploited more then another. When you buy clothes at say walmart, someone in china is getting almost nothing, yet someone who makes minimum wage in in the US, if converted to chinese dollars, would have a better standard of living then the factory worker IF he lived in china and was able to work for a US company remotely, for the sake of this example... it's imbalances like this that expose the dependencies of needing a lesser value labour class to create "upper" lower classes, i.e. minimum wage people in the US and canada buying stuff from walmart...

Then there is the fact that people in economies suck up strategic world resources and develop technologies and weapons at increasing speeds, and when you got countries like india and china with 1+ billion people, you can bet there's going to be a lot of political manuevering in attempt to prevent first world nations from becoming 2nd and 3rd world in the "quasi-capitalist market pyramid" of countries.

Mordy, does your above reply to Fuzzy have any real relevance to what Fuzzy said? Fuzzy was talking about the importance of property law. You do not even mention property law in your reply. Seems your reply has little or nothing to do with the point that Fuzzy was making.

You appear to be incorrect about Sweden. Socialism and communism in Sweden has been declining:



The Social Democrats returned to office in 1994, but were forced to continue the trend towards greater capitalism and a free-market system, with more privatization of government-controlled industries. Consequently, Sweden joined the European Union in 1995. However they have not yet switched to the euro currency. They are obligated to do so.

Nevertheless, I would agree that property law is important, and that a country that fails to protect property ownership is headed towards disaster.

the difference here is though that those that some refer to as the "ruling classes" have no need to save or work to have the million dollars.


your teacher was unfortunately mistaken, there are many who work in low paid dead end jobs who earn barely enough money to survive in the world. they likely do not have surplus money to save, and don't drive fancy cars as they cannot afford to buy them even if they wanted to.

Well, if I saved up a million dollars and passed it on to my offspring would they then be a part of the ruling class? If all it takes is just passing on some wealth then it is possible for one to be a part of the "ruling classes" by the 2nd generation. I would wager that most of the rich today are descendents of some person who did work his way up. Saving up a million dollars is not an impossibility, it becomes significantly easier with a college background.

http://moneycentral.msn.com/content/Inv ... P73751.asp
Clever investing to get a million dollars

http://moneycentral.msn.com/content/Col ... P59866.asp
Value of a college degree

http://moneycentral.msn.com/content/Sav ... p?GT1=6113
Heck, even some success stories about how people became millionaires on their own thrown in for good measure.

With clever savings a good degree and most certainly with a combination of the 2, one can become a millionaire. In fact, there is even some kid who was taught by my computer science teacher who is now some multi-millionaire working for google.


I tend to doubt that he was mistaken. He even had us do some mathematical equations to show us how some investments can get us a million dollars if we just save regularly and put in a solid amount. This teacher also encouraged us to go into fields like engineering and medicine which according to one of the links above have massive pay outs so given all of the variables I would say that he was being very accurate when he said that every one in the class could save up a million dollars. Now, I am not going to argue that it is possible for every person in existence to become a millionaire, the major problem being that some people lack the talent to pursue certain paths but becoming a millionaire is most certainly something that is attainable by people who were not born millionaires.

I'm remembering something one of my teachers said." If you took all the money in the world and distributed it to everyone equally, In 2 years time, everyone who WAS rich, would be rich again. everyone who WAS poor, would be poor again.

Disfunctional statement. I live in Alberta Canada. Average wage is over 30 bucks an hour. Minimum wage is 7 bucks I think. Very few people make that. Tim Hortons, a donut place for example, pays 15.xx an hour to start.

At the other end of Canada, in Newfoundland, wages are far less. About half of the newfies have left newfoundland to find work, largely in Alberta.

Alberta has farming ---- so does Newfoundland(but far less)
Alberta has logging ---- Newfoundland has even more trees than us.
both have tourism.
both have lots of oil.
Newfoundland has far more fish(alberta is landlocked.)
Neither has much gold.

So it all balances out pretty well. Except for the wage disparity. Its even in the same country! I guess your theory is wrong. Wages are not consistant, or even close within one set of borders. You cannot nail it down to geography either.

If it were cheaper to hire workers and do the work in newfoundland, It would be done, but obviously, it isnt.

I like to look at money and economy through simple eyes. What does a can of coke cost in America? 1 dollar to 1.25 US. Whats it cost in Canada? The same. Our dollars are not worth the same. The Canadian dollar is only worth 0.8 American dollars. Is that enlightening? If not, how much does a can of Coke cost in your country, or in say, India? I'll bet you it doesnt cost 1 dollar US.

See, I've never been to india, but I know they sell coke there, and I know there are not enough rich white people to drink it all. Indians certainly dont get to drink it everyday, but its priced at a rate that will sell.

In India, 80% of people live on less than 2 dollars per day. For that 2 dollars, they are buying food and clothes, shelter, and other necessities. Now in Canada, for 30 dollars an hour, at 10 hours a day, we are making 200 bucks a day(after taxes). With that 4000 a month, we pay for... food and shelter, clothes, and other necessities.

See how it equals out? Everyone is in the same boat. Costs rise to match income. No matter how many raises the boss gives you, life keeps eating it up.

But we are not equal. We are not. Its plain for everyone, and anyone, to see. Someone is grinding you into the dust? I dont think so. Thats just the martyr complex speaking.

Its property. But property is not land. Every country has land. Property, really, is a codified idea.
Its a concept with legal bearing. A description of the quailites of that land. A paper trail of previous owners. If I say, who lived in your house(on your land) 100 years ago, and you say, "I dont know" or "I'll ask the neighbours" then you dont have strong property laws.

Here, we can do that(I doubt any homes are older than 60), or we can go to city hall and check the records. The important point is that they are going to know. They are going to know the sale prices too. They are not going to say, "well, it looks like it was owned by...., but nobody lived there.." even though there is a 200 year old house on site. If a home is made, the records are adjusted. The permit system passes that information on, as do the census every 4 years.

So if the land was purchased 7 years ago for 185 000 dollars, and today my mom gets her house appraised for 400 000 dollars, then as far as a bank is concerned, she has 215 000 dollars of equity, as well as the other 185 000 dollars value in the house. When she sells, the sale price pays off the original loan, and she pockets the rest. This is all pretty elementary..

But. If she doesnt want to sell, she can go to the bank and borrow against the increased value of that home, and use that money to buy a sail boat, start a business, go back to school, retire.. whatever.

That is where capital comes from. That is the driving force of western society. The ability to use inflation to your advantage to aquire luxury goods, or to increase your income.


So even though we end up spending the bulk of our money on living expenses, same as all people world wide do, we have a vehicle for the accumulation of market extras. Because our laws and society is stable, it is possible to borrow money for long terms, so we can buy a quarter million dollar house, if we can come up with the initial payment. 30 years later, we are still paying for it, but nobody is going to complain, and that house is probably going to be worth far more than what was paid into it.

I can borrow money from a bank against the equity in my house, spend it on paint, new furniture, a patio, or other improvements, install the afore mentioned stuff, and turn around and sell it. Because I dont have to bribe officials, apply for permission, wait for beauocracies to get around to me, it can be bought and re-sold in a matter of days, instead of years.

Third world people are NOT dumb. They are resourceful, clever, practical. But people will not lend them money, because you cannot say where they will be a day later. Perhaps they will get hauled off by the police, never to be seen again. Perhaps you cannot find their house, because its not a legal address.

I have been to the homes of a lot of people that emigrate to Canada, and one thing they do that is AMAZING, is that they move the whole family, buy one house, and all live in it. Five or six adults works full time and make five or six payments monthly against the home for a year, ten years, or however many they need to. At the point that the first home is paid for, they borrow money against the home and buy a second. This goes to the eldest son and his wife, and the process repeats. Extra rooms are rented out.

20 bucks an hour(thats under average), five people. 40 hours a week(under average again), is (20 x 5 x 40) = 4000 dollars a week. thats 16 000 dollars a month. Assuming they each keep 1000 for food and vehicles(reasonable), thats 11 000 per month on a house with a mortgage of say, 1500 dollars.

In 12 months, if no one gets greedy, they have paid 132 000 dollars against a house. Now thats not enough for most homes around here, but its near the bottom end. And of course, they pay interest rates too, but in 2 or 3 years, they have put in more than 300 000 dollars, and that house is theirs, totally.

Now they go back to the bank,and borrow 300 000 dollars. Yes. Less than four years after getting off the boat, they are borrowing that much money. They take that money and purchase 2 or three more houses. They place a family member in that house and start again, but this time, there is a head start, because now they own 3 houses and they are each only owing 100 000 dollars, compared to the orginal 150 000 for one house. The interest payments are going to be less by 1/3.

Again, four years later(or maybe even sooner), All the houses are owned clear of debt. Once again, the houses are used to borrow money. 3 houses valued at 150 000 (I am not assuming inflation effect on house prices), allows them to borrow 450 000 dollars. Almost half a million less than 10 years after arriving in Canada. In this time, there have been no civil wars, no collapse of society, no loss of records, no illegal squatting, probably no murdered or missing relatives.

They take that Half million and buy 4-8 more houses, and rent them all out. You do the math for the next 5 years or so. Then tell me why someone fresh off the boat can do that in Canada, but they cannot do that in the homeland. Each time the cycle starts again, they get back into a hole, but the hole is not as deep as the last one.

A more modest path would be..

0.0 3 couples(six adults, no kids) get off the boat
1.0 work and rent for one year. save hard. total savings = 50 000. income 50 000 per year, but not all saved.
2.0 Buy a house(150 000). put all saved money down. 100 000 debt + 150 000 interest, equity 50 000
3.0 costs go down due to shared living. savings 50 000 per couple(2 live as one). 100 000 debt + 150 000 interest + 200 000 equity. House is just about paid for.
4.0 House is paid off. debt 100 000 interest 150 000 equity and savings 350 000. balance is 100 000
4.0 two more houses bought for 2 and 3 couple. first couple stays in first house. Balance makes two down payments of 50 000 per house, plus 50 000 equity from first house.

at the end of year 4, each couple owns a house, owes 50-75 thousand against it(plus interest). If they continue on their own, at the previous rate, they will own their homes in under 10 years.

A mortgage is set up over 30 years, with it being designed to give the bank their interest money in the first 7 years. That is the point when most people move, and they start the process again.

Perhaps someone could enlighten us about how western countries oppress and force people to work for higher wages than they would earn domestically?

Last edited by Fuzzy on 30 Jun 2006, 9:34 pm, edited 2 times in total.