report

Pros and Cons of Capitalism

JAMES WATT STEAM ENGINE
JAMES WATT STEAM ENGINE

Industrial Revolution

The Industrial Revolution changed the basis of economies from agriculture to industry and commerce.  Mechanization, and then standardization, lowered production costs tremendously, which made hand-made goods, and the artisans who made them, obsolete.  Industry required the outlay of huge amounts of capital for plants, machinery, and raw materials.  To recoup this investment, goods were produced and sold at a price above the cost to produce them, creating profits.  Merchants then bought these goods, transported them to where they perceived demand to be, and sold them to the public at a higher price than they paid the manufacturer, creating profits.  This is Capitalism.  

THE WINNERS CIRCLE
THE WINNERS CIRCLE

WINNERS

The people who succeed in a Capitalist system are, nine times out of ten, those with superior intelligence and energy, who determine to work hard and save their earnings.  The founders of great industries virtually all share these characteristics.  The function of saving money for the fledging entrepreneur is to rise himself above daily drudgery for daily bread, develop plans of his own, and find those who will cooperate with him to make his dreams come true.  Contrary to the opinion of some class warriors, the upper strata of Capitalism is not static; individuals and families rise up into it, and fall out of it, every year.  Capitalism provides ladders for talent to climb.  

WORLDWIDE GROSS DOMESTIC PRODUCT 2008 CORRELATES TO CAPITALISM
WORLDWIDE GROSS DOMESTIC PRODUCT 2008 CORRELATES TO CAPITALISM

Capitalism Definition

Capitalism provides ever-rising standards of living and leisure time for those who work. This improvement is taken for granted after generations, and this, combined with the frustrations of those who get the short end of the stick, breeds social unrest; an unrest that can include hostility to Capitalism itself. In order for this discontentment to develop, there needs to be groups to whose interest it serves to stimulate and organize resentment, to feed it, to voice it, and to lead it.

Capitalism rests on the premise that effective competition is the best way of guiding individual efforts. Parties in a free market economy are free to buy and sell at any price at which they can find a partner to transact with; and anybody is free to produce, sell, or buy anything that may be produced or sold. The law is limited in a free market to the recognition of private property and freedom of contract. Socialism is against competition.

Capitalism is a system in which the distribution of persons between different occupations stems from their own choices. It is therefore necessary that remuneration in these occupations should correspond to their usefulness to the other members of society.

BLACKSMITHS
BLACKSMITHS

Creative Destruction

Some highly trained men with hard-earned skills have suddenly lost their value to society because of some new invention of great benefit.  The history of Capitalism is full of such occurrences, sometimes affecting hundreds of thousands of people at the same time.  This diminution of income and disappointment of hopes through no fault of one’s own, despite exceptional skill and hard work, offends the sense of justice of some people.  These people would prefer that the affected persons continue to receive their former income, and that they be sheltered from the vicissitudes of the free market.  But if those whose usefulness has suddenly been reduced are protected against their loss, then those whose usefulness has suddenly increased must be prevented from gain.  Then remuneration would no longer have any relation to actual usefulness.  It would depend on the views by some authority to decide what a person ought to have done.  The differences in remuneration then no longer represent an inducement for people to make the changes that would make them more useful to society, and in fact make it impossible for those affected to judge whether changes are worth the trouble. People are not willing to do their best without adequate incentives—and they surely will not give their best over long periods of time unless it benefits them directly.  Without these incentives, punishment is necessary to maintain discipline, as with slave labor.  The ultimate sanction of Socialism is the hangman.  

AFTER CAPITALISM IT COULD BE SAID THAT THE WORLD'S STANDARD OF LIVING WENT UP A BIT
AFTER CAPITALISM IT COULD BE SAID THAT THE WORLD'S STANDARD OF LIVING WENT UP A BIT
CAPITALISM IS DEAD
CAPITALISM IS DEAD

Positive Effects of Capitalism

Wherever the barriers to the free exercise of human ingenuity were removed, man rapidly improved his lot, with the lives of no class of people not substantially advanced.  To appreciate the fantastic results of Capitalism, we must measure it by the hopes men held when it began; and there is no doubt that its success surpassed man’s wildest dreams. By the 20th Century, an average working man in the Western world had physical comforts, security, and personal independence, which for previous millennia would scarcely have been dreamed possible.

Intellectuals sometimes use the freedom afforded by Capitalism to nibble at its very foundations.  But of course, criticizing is what bored intellectuals do best.  The foundations to be nibbled include buying, selling, competition, the free market, prices, costs, incomes, rents, interest, wages, money, and profits.  Socialism would do away with all of this, along with the worries about what one’s actual and potential competitors might do, and anxieties about fluctuations in the general business climate.  Socialism would therefore claim to reduce the brainpower required to run a business or industry.  

AMERICAN CAPITALISTS
AMERICAN CAPITALISTS

Theory of Capitalism

Capitalism relies on the profit motive as its engine. The profit motive is indispensable to sound administration of any public entity. Capitalism provides motivation to individuals and companies; it distributes responsibilities and rewards; it is a system of prizes and penalties. A company that is inefficient, and a bad judge of opportunities; fails to market its products properly, hires poor employees, provides an inferior product, and will be weeded out quickly by the free market.

In modern capitalist societies, family life means less than it once did, what with many people producing no children or only one child. The concern for legacy and posterity loses its power to mold behavior. For many, the family and the family home is no longer a motivation to succeed in business.

Childless individuals become more self-interested and detached from society, than those who see the world from the windows of a family home. A man with a family works and saves for his wife and children; his views and behaviors are shaped by this reality. A man with heirs works for the future irrespective of whether or not he is going to harvest the crop himself.

People of the not-too-distant past financed their homes, vehicles, and furnishings from previous earnings. The increasing want for consumer goods has led to the credit laden society we now have.

THE PALE BLUE REPRESENTS DEMOCRACY WHICH APPEARS TO CORRELATE TO THE STANDARD OF LIVING AND LEVEL OF CAPITALISM
THE PALE BLUE REPRESENTS DEMOCRACY WHICH APPEARS TO CORRELATE TO THE STANDARD OF LIVING AND LEVEL OF CAPITALISM
MEETING OF SOCIALISTS
MEETING OF SOCIALISTS

DEMOCRACY

Democracy is a system for making decisions for the common good, by making the people decide issues through individuals who are elected to assemble in order to carry out their will. Democracy and Capitalism are joined together at the hip. It is hard to imagine one without the other.

Only within Capitalism is Democracy possible. Compared to Monarchism or Socialism, Democracy limits politics by limiting political authority. The state exists to provide legality, and also to provide a firm framework for autonomous individuals in their endeavors. Democracy is an obstacle to the suppression of freedom that is required by Socialism.

Democracy offers the widest and most equal of opportunities, and the greatest personal freedom to individuals of any system ever devised. Capitalism is perfectly fitted to Democracy, in that it features individuals best served by being left alone, rather than those who wish to live off the state. When nations are divided as to social structures, Democracy suffers. True Democracy never desires its economic affairs to be in the sphere of politics, as poor political strategies would then mean a lack of bread. It is in everyone’s best interests to let free enterprise supply bread where it is demanded.

RISE OF WORLD STANDARD OF LIVING CORRELATES TO RISE OF CAPITALISM
RISE OF WORLD STANDARD OF LIVING CORRELATES TO RISE OF CAPITALISM

Pros and Cons of Capitalism

Capitalism does not simply mean that persons may influence production by choosing beans or peas at the grocery; that a young person may choose between a vast array of career paths; that manufacturers may choose what and how they produce. Capitalism is a set of values; it is an attitude toward life; it is a civilization, and yes— it is inarguably a civilization of inequality amongst individuals and families.

Unfettered Capitalism produced the incredible wealth one sees in the United States today. It cannot be assumed that it will continue to raise standards of living while under increased hostility and interference from the intelligentsia. Private enterprise may be burdened and regulated beyond its powers of endurance. The gold standard had to be abandoned as the freedom of free enterprise diminished.

The burdens on business from the gadgets of regulation were a fraction of what they are today fifty years ago. The power of labor drove manufacturing from America as the labor movement renounced allegiance to the scheme of values of the private-profit economy. Coercive legislation, under the guise of Social Justice, but in reality serving well-organized coalitions of special interests, has dimmed the light of the world—Capitalism.

LADY JUSTICE
LADY JUSTICE
POSITIVE EFFECTS OF CAPITALISM
POSITIVE EFFECTS OF CAPITALISM

Capitalism Vs Socialism

Socialism as Central Planning cannot be implemented without coercion. Therefore, Socialism cannot be put into practice except by methods that Socialists claim to disapprove. The words “Tolerance” and “Diversity” do not mean what they mean in the English language, since the aims of those who use these words, as slogans, are the opposite of the definitions.

A common complaint about Capitalism is that it is a competition. There is a tendency in schools now to give “participation” ribbons rather than awards for the best, the brightest, and the fastest. But competition is blind, much like Lady Justice. It is no respecter of persons.

There are some who object to inheritance, since some inherit more than others and therefore start the Capitalist competition with an advantage. But for millennia people have strove to succeed in life for the express purpose of benefiting their children and grandchildren.

Under Capitalist competition, not only do different occupations earn different wages, but also there are huge differences in the incomes of the most and least successful doctors, architects, writers, actors, boxers, jockeys, plumbers, gardeners, grocers, and tailors. Even the liberal John Stuart Mill wrote, “Equality would require that a handful of human beings weigh everybody in the balance, and give more to one and less to another at their sole pleasure and judgment, backed by supernatural terrors.”

The fact is, an unskilled worker earning low wages has more freedom to shape his future than a manager or engineer living under Socialism. He can change his job or the place he lives, express his views openly, and enjoy his leisure time as he wills. He is free with no impediments; his life is not assigned to him by brute force.

NO PARTICIPATION AWARDS HERE
NO PARTICIPATION AWARDS HERE

Private Property

Private property is the guarantor of freedom, not only for those who own property, but also for those who don’t.  Because the means of production is spread among a multitude of independent people, nobody has complete power over the people; individuals have the power to decide what to do with their own lives.  When the means of production is vested in “society” or a dictator, then society or the dictator has complete control over our lives.  Even a boss who is a millionaire has far less control over you than a bureaucrat who wields the coercive power of the state and at whose discretion it depends whether and how you are to be allowed to live and to work.  

MONEY MONEY AND MO MONEY
MONEY MONEY AND MO MONEY

Pros and Cons of Capitalism

Bureaucracy may yet conquer the free enterprise system with its never-ending restrictions such as Cap and Trade legislation. Central Planning may yet emerge as acceptable to America, though the word Socialism will surely be avoided by any who have any inkling what that word actually means. Capitalism—the free enterprise system—may yet be deemed not worth fighting for as a scheme of values, a way of life, and a civilization.

The limitations of our own personal incomes restrict our consumption of goods, and when we lack the money to acquire things we want we may come to the conclusion “I hate money.” This is a mistake, as money is merely an instrument through which the balance between our incomes and desires makes itself felt. Money is in fact, one of the greatest tools of freedom ever invented by man. Money opens an astounding range of choice even to the poor in our society.

The political ideas of freedom, civil rights, constitutionalism, and parliamentarianism, come from the individualistic worldview known as Classical Liberalism.

More by this Author

  • Definition of Marriage
    558

    My library contains three dictionaries; their definitions of marriage vary in context, but ultimately each source supports the same definition. The definitions of marriage are as follows "The legal union of a man...


Comments 113 comments

Vladimir Uhri profile image

Vladimir Uhri 6 years ago from HubPages, FB

Hi James. Very good writing!

I have some comment. I prefer name freedom system rather than Capitalism. Marx expanded capitalism in negative light. Now we have socialistic capitalism, which is not good. When materialism comes, loving money and sending God out of country we are in troubles.

It is God who blessed this country in the past...


BDazzler profile image

BDazzler 6 years ago from Gulf Coast, USA

For decades in the "American Century" the best way of assuring "redistribution of wealth" was the stock market. Small, wise, investments over time into industries with solid conservative business practices have led to millions of people to comfortable retirements after years of hard work. The risk and reward were balanced.

Wrong regulation driven by socialist theory has really messed this up.

The role of government is to make sure every body "plays fair" (i.e. when you buy a gallon of gas, with 87 octane, it is not 0.96 gallons of 84 octane) not to control who is deemed worthy to buy gass.

Your excellent hub, shows how this works!


RevLady profile image

RevLady 6 years ago from Lantana, Florida

As with most things, if not everything, there are pros and cons. The issue with capitalism becomes which outweigh the other or tips the scales, the pro or the con.

Nice hub James. Thanks for the stimulation.

Forever His,


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

Vladimir! How great to receive you as my first visitor! I didn't know you were a guitar player. Freedom System works for me, my friend. Though it's too late to change my title now. I agree with you that it was God who blessed this country. The LOVE of money is the root of all evil---not money itself. Thanks for coming and for your excellent comments.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

BDazzler--- You are correct. I should have mentioned that buying shares of stock makes available ownership in major corporations open to anybody with a few dollars to spare. That is an excellent point. A look at a table of the way money compounds shows that saving is one big key to a successful life. You nailed the proper role of government. Thank you for that. I appreciate your visit and remarks.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

RevLady--- Yes, there are those pesky pros and cons. :-)

Thank you for your comments and you are welcome.

James


ethel smith profile image

ethel smith 6 years ago from Kingston-Upon-Hull

Food for thought as always James. Your writing is always thought provoking and stylish.


Hello, hello, profile image

Hello, hello, 6 years ago from London, UK

A masterpiece in every way I look at it. Living in West Germany I have heard news every week that people risk to be shot when escaping. There must have such a pressure on that they saw no alternative but to risk their life. That doesn't come from nothing and that is what the system is all about. That doesn't make sense to go and choose it.


sheila b. profile image

sheila b. 6 years ago

Who wishes to destroy capitalism? Students. Academics. People without a clue. For example, Obama and his cronies have shown they do not understand the complexity of our system.


ehern33 profile image

ehern33 6 years ago

Excellent write-up. There are so many examples of why it works and I am sure of a few why it doesn't, and that is because we don't live in absolutes or have the human faults eliminated from the equation (greed). I will take capitalism any day or night. I may not have the potential that the next person has, but I rather have it that way than have the potential and not be able to take advantage of it.


drbj profile image

drbj 6 years ago from south Florida

James - I want to tell sheila b. if she runs for something ... anything ... she has my vote.

The capitalistic system with all its pimples and warts still is the BEST system in the world. That fact is underscored for me every time I travel to another country.

Thanks, James, for a thoughtful, informative hub.


Tom Whitworth profile image

Tom Whitworth 6 years ago from Moundsville, WV

James,

Kudos for your informative and passionate exposition. I hope it's not a swan song. Let's go to a Tea Party.


eovery profile image

eovery 6 years ago from MIddle of the Boondocks of Iowa

Great hub as always. You put these together well.

Keep on hubbing!


artrush73 profile image

artrush73 6 years ago

Great read, thanks for a cool hub :) Looking forward reading more of your work :)


"Quill" 6 years ago

Economies such as the US and Canada are affected greatly by things called free trade. Both countries come to an agreement on what is fair to the other.

Blessings


carolina muscle profile image

carolina muscle 6 years ago from Charlotte, North Carolina

Interesting perspective on this subject- and as usual, a fine job, James!!


Pamela99 profile image

Pamela99 6 years ago from United States

James, A great hub on capitalism as the pros clearly outweigh the cons. Our country is surely headed in the wrong direction.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

ethel smith--- Thank you, dear, for coming by and leaving your kind compliments. :-)


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

Hello, hello,--- Thank you so much for your accolades. And you are so right: it doesn't make sense to volunteer to accept a system that so many risked their lives to escape from--who actually lived under it. Walls are an important part of understanding this. There are no walls to keep people in a free society; there are walls to keep them from escaping Socialism. That should be enough said right there.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

sheila b.--- Your comments are right on target. Thank you very much for coming by to visit and leaving your wise words here for all to ruminate on.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

ehern33--- Thank you. I appreciate your excellent remarks. I agree with you wholeheartedly.


msorensson profile image

msorensson 6 years ago

As always, a well put together hub, James.

Pure capitalism encourages creativity, innovation, and imagination in a way of friendly competition.

On the other hand, it is human nature to want more and this is when we encounter problems.

A machine can play the same game again and again. Not humans. They want market domination leading to a fine line between capitalism and monopoly.

The mechanism by which Socialism can be implemented without so much dissent is by engendering fear.

From fear arises the Seven deadly sins.

The transition between capitalism to socialism and eventually to communism is not that difficult.

Yes, it will take years of planning, yes it will take a massive group of people and resources, and it will take a little bit of time but it can happen via the mechanism of fear.

Chaos by any means that will destabilize almost everyone will engender fear and will make this transition far easier than one would theorize.

But there is a God, James [smiles]

Warmest regards,

Melinda


Red Anchor profile image

Red Anchor 6 years ago from United States

Capitalism is the only moral socio-economic system on earth. And it isn't just about what we can sell, or what we can produce. It's even simpler than that. It's about our inherent right to act in our own self interest. It's knowing that the only thing you can't do is perpetrate force or fraud against other human beings. It's knowing that at the end of the day, what's yours is truly yours.

If you believe in the virtues of Capitalism, don't be afraid to stand up and talk the socialist lemmings away from the edge of the cliff. "Socialism works in Theory" is not a valid statement. It is the insidious basis for the slow creep toward socialism in the United States.

And please don't forget that what we have now in the United States is NOT capitalism. It is a mixed economy, where tenets of socialism drag it down while the tenets of capitalism push it forward. Big-business should also be questioned harshly given its coziness with the government. The government should exist to protect the rights of Big Business, not grant or deny them based on who holds the most political capital. I've heard this suitably referred to as "Crony-capitalism". It isn't the real deal.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

drbj--- You are most welcome. I agree with you 100%. Thank you for coming over and leaving your fine comments. :-)


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

Tom Whitworth--- Thanks for the kudos my friend. It's always great to hear from you. I have been to one Tea Party and I had a great time there.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

eovery--- Thank you! Thank you very much.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

artrush73--- You're welcome. Thank you for taking the time to read my article and for letting me know that you appreciate it.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

"Quill"--- Thank you for coming by to visit and leaving your fine comments. It's always great to hear from you, my friend.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

carolina muscle--- Thank you, brother. I appreciate you letting me know you came by.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

Pamela99--- Thank you, dear. I agree with Quill about free trade, and I agree with you about the wrong direction in which our country is headed. Let's hope we turn it around.


JannyC profile image

JannyC 6 years ago

Nicely written. Found this informative as always


Dim Flaxenwick profile image

Dim Flaxenwick 6 years ago from Great Britain

Excellent 'rounded out' explanation of Capatilism.

Your work is always so thorough. Thank you James.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

msorensson--- Thank you, dear. I must say, and I'll keep this short, your remarks are brilliant. Fantastic insights. Thank you, Melinda.

Faithfully Yours,

James


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

Red Anchor--- Well said! My, this is two brilliant commentators in a row who truly get it. I am dazzled. I must quote you:

"And please don't forget that what we have now in the United States is NOT capitalism. It is a mixed economy, where tenets of socialism drag it down while the tenets of capitalism push it forward."

Amen!

Thank you for coming by and offering your wise words.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

JannyC--- Thank you, young lady. I am well pleased at your response.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

Dim Flaxenwick--- You are surely welcome. Thank you very much for your kind compliments. I appreciate you. :)


secularist10 profile image

secularist10 6 years ago from New York City

I enjoyed this hub, some important thoughts here. We definitely need some solid defense of such rudimentary things as profit, competition and free markets nowadays.

However, I hope you won't mind if I disagree on a few issues. For one thing, although free competition and profits, etc, are important, there is not a single society on this planet that became prosperous through unfettered free markets alone in the modern era. I know that sounds like a shocking statement, but I can back it up if necessary. Every single country that is today "industrialized" owes a significant amount of its prosperity to state intervention--often heavy intervention--at some point in its history.

In addition, we should remember that the market is not infallible. Unlike the simplistic assumptions made by university economists, in the real world perfect information, perfect competition, and the theory of consumer choice (just to name a few) typically are nowhere near realistic assumptions (who are the pointy-headed intellectuals now? :)


Tom T profile image

Tom T 6 years ago from Orange County, CA

Terrific Hub. Well said and your explanations are easy to follow. I have a view that the capitalism envisioned by our founding fathers was not pure capitalism but a moral capitalism.

For example, some months ago it was discovered that toys from China had high levels of cadmium in them. Cadmium is cheap and it solves a manufacturing problem. Therefore, the owner of the business can make larger profits with cheaper cost of goods with the same sale price. Problem is that it is poison too. This is pure capitalism.

Sure you can argue that in time people may stop buying the toys because they are dangerous and the system will correct itself but if there is morality or ethics involved, the company would never do that in the first place.

It is the the Judaeo-Christian morality combined with capitalism that makes our system so bountiful and awesome. It is the grace of God and the fruits of freedom that bless us.

May God bless you and keep hubbing.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

secularist10--- Welcome to the Hub Pages Community! I'm glad you enjoyed the Hub. Disagreement is healthy.

Britain became the most prosperous nation in history with unfettered Capitalism and America was quite wealthy in the late 19th Century. By State intervention, perhaps you mean the American railroad system? The government helped make that possible.

The market is not infallible, that's true. But what is? Surely not Central Planning Bureaucracies.

You surely make excellent points. Thanks for adding value to the conversation. My hat's off to you.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

Tom T--- It's great to hear from you. Thank you for the compliments. I applaud you for hitting on a vital point: moral capitalism. You are spot on with this. The Founding Fathers in fact expressed that America could not survive as a Democracy unless she remained a moral society with common virtues; that only a moral people can govern themselves. Your Chinese example is excellent. An American company would have been prosecuted for this crime, but this would not indict Capitalism as a system. We always have to watch for criminal activity under any system. I will quote you here:

"It is the the Judaeo-Christian morality combined with capitalism that makes our system so bountiful and awesome. It is the grace of God and the fruits of freedom that bless us."

Amen!


John B 6 years ago

No other system compares favorably to capitalism; that's for sure. A snag we've not been able to overcome is what is possible by those who know how to exploit data sharing technologies and the complexities that go along with it. Wall Street geniuses can't be controlled by anyone not as smart as they are and people as smart as they are won't be employed in government regulation. They will continue to build houses of cards that are unidentifiable because their true peers are busy doing the same thing.

An example of how the government has trouble employing the truly capable is the fact that they now allow CIA members to moonlight for private companies using CIA taught techniques. Otherwise, they'll just leave for the big bucks. These agents understand "deception detection" that incredibly makes or breaks some mega dollar sales and mergers.

Anyway, when excessive greed and execessive smarts combine, it can prove disastrous and I don't see a fix for this anytime soon. There'll always be a Bernie Madoff. Socialism in any form or capitalism.


Rayk 6 years ago

James

This is a very eloquent and instructive hub- One or two points. The first relates to your view that 'capitalism is a set of values'-Is it not a system-...a system lacking in any objective set of values, and vulnerable to 'capture' as we are now seeing. This absence of objective values has subverted the global capitalist system, which has been 'captured ' by 'corporate capitalism'. The values-based ‘Economy of Communion’, advocated by Chiara Lubich (check her writings out) has embedded values which, while based on capitalism, has in-built values that direct its creative energies to a moral objective.

Also, while, as you indicate, capitalism has created 'incredible wealth' it has also created incredible inequalities, within and across countries.

The subversion of capitalism has also lead to the erosion of democracy- we are drowning in laws and legislation, whose net effect is to continually constrain our basic freedoms.

What is needed is a set of objective values outside of capitalism-each of the theistic faiths tell us that these values are based on the transcendence of the human Person- conclusion that cannot be inferred from Adam Smith or those that have come after him

A beautifully written hub that really engages the reader. Thank you for all the work


itakins profile image

itakins 6 years ago from Irl

James

I don't believe 'capitalism'is without its faults and problems-but I do believe it is a better option than the situation into which we are spiralling .I don't think we are at the beginning or middle of this transition-but it's reaching full fruition.

Great hub-it has motivated much discussion here:)


Michael Shane profile image

Michael Shane 6 years ago from Gadsden, Alabama

Hey James, as Alan Jackson sings "Right on the Money" You got it! I personally want to thank you for being one of the 1st to follow me & that meant a lot! I always enjoy your intellectual way of thinking & developing masterpiece hubs!


John B 6 years ago

Remember the hippie communes of the 60s? Perfect miniature socialist societies. Everyone got to share all the stuff equally except one big dog, who got to share some of everyone's share. Funny how that always works out like that. I believe everyone who didn't starve eventually made it back to mommy and daddy's (who still worked). Guess all the members being equal(created laziness) wasn't a recipe for success then either!


prettydarkhorse profile image

prettydarkhorse 6 years ago from US

It is not the consciousness that determines the being, -- it is the being that determines the consciousness, to a certain degree I believe that phrase, and the power of the economic system to mold what kind of people we become, If you're rich, you can buy anything, except of course happiness-- to a certain extent yes! Capitalism goes well with democracy in the ideal but not so in practice hehe, Very good article SIR, Maita


Peggy W profile image

Peggy W 6 years ago from Houston, Texas

You always put so much thought and research into your hubs James. I thought that some of your graphs spoke volumes.

As some of your readers have already illustrated, morals combined with capitalism make for the best results.


soumyasrajan 6 years ago from Mumbai India and often in USA

Good article James! Good description of terms. Time being no other model has succeeded in providing a minimal life style to every working person in a country. I do not know why it should be called capitalist, it seems to be more socialist then the one's followed in so called socialist or communist countries which has generally resulted in only dictatorships.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

John B.--- Yes, there is a lot of truth in your first paragraph and this represents a bugaboo for Capitalism--a hurdle to be overcome, a puzzle to be solved. No system is without its vulnerabilities.

I did not know about the CIA moonlighting policy--that is troubling to say the least. I think the reopening of the old CIA cases by Eric Holder has made the CIA an unattractive proposition for the young who have the talents.

Thank you for your excellent comments, cuz. It's always great to hear your thoughts.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

Rayk--- You are welcome. Thank you for your gracious compliments. You wrote:

"The values-based ‘Economy of Communion’, advocated by Chiara Lubich (check her writings out) has embedded values which, while based on capitalism, has in-built values that direct its creative energies to a moral objective."

I did check that out and it sounds like a wonderful idea and movement.

"Also, while, as you indicate, capitalism has created 'incredible wealth' it has also created incredible inequalities, within and across countries."

Yes, it has. Despite the inequalities, which are inherent in a system based on competition---and carrots for those for achieve higher usefulness to the world, I still say Capitalism has caused all boats to rise in the societies that have participated. I don't want everybody to be rewarded with the same prize regardless of their achievements. Nothing could worse damage the human spirit. Not to mention ruin the Olympics. :D

"The subversion of capitalism has also lead to the erosion of democracy- we are drowning in laws and legislation, whose net effect is to continually constrain our basic freedoms."

Amen! Now you're talking. Thank you for sharing your wisdom with us.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

itakins--- Thank you very much. I agree with you. I'm not sure we are the end of this transition though. That is a nice hope but we may be at the beginning.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

Michael Shane--- You are welcome, Mr. Shane. I want to thank you for the wonderful accolades, which have left me gratified for your encouragement and support.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

John B.--- Yes I do. I lived in a hippie commune one summer in Sarasota. It was based on a beautiful idea--let's all contribute all we can to a common pot and everybody shares everything, including our "old ladies." Before I left it had started to unravel as there were some there who never contributed anything, except to the conversations. The conversations were the best part about the place, as we contemplated our cosmos. The contributions materially were decidedly unequal, with some guys working ten hours a day in construction in the scalding Florida sun--and they paid the bills while most lay around smoking dope and having sex. Needless to say, the workers decided to get their own pad.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

prettydarkhorse--- Hello Maita! Always a pleasure to see you and read your words. Thank you for sharing your insights with us.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

Peggy W--- It is a pleasure to hear from you again! I was wondering if anybody would mention the graphs. I would like to hear a Socialist argue with those!! And yes, we agree, Capitalism combined with Morals (and Ethics) is the best possible system for humankind.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

soumyasrajan--- Thank you! These terms can be confusing, especially when ideologues try to confuse us on purpose to further their ends. I appreciate your visitation and your fine comments.


OpinionDuck profile image

OpinionDuck 6 years ago

James,

The problem that I see with trying to discuss captitalism and socialism is that it is purely semantic and doesn't change anything.

What I would like to see is the view of what the country should look like if it were not constrained by labels?

Start with the role of government versus the role of the people.

Forget about describing these roles in terms of labels, but rather in terms of functions.

For example,

what is it that government should do?,

and what is it that the people want it to do?

and finally what is it that the people need it to do?

Also,

has the concept of "United" states become too much of a burden for this country.

Finally,

If the government is not part of a solution, then it should get out of the way for those that have a solution.


itakins profile image

itakins 6 years ago from Irl

James

Yes ,I didn't express myself very well.I actually meant the wheels are well in motion for drastic change-it has been an ongoing insidious process,and much of what we feared is now reality.

I guess I was so bowled over by the comments of Rayk:)!!A smart man ,I suspect:)


richardheft profile image

richardheft 6 years ago from Stratford, CT

Spoken like a greedy selfish person. If capitalism worked then the middle class would not be disappearing, our schools. roads, infrastructure, etc. would not be falling apart, teachers, police, fireman, etc. would not be losing their jobs. When one makes more another makes less. The only answer is socialism or maybe you want to get rid of social security and medicare and put old people out on the streets, let them starve to death, after all it's all about winners and losers, not human beings. One day the masses of poor people are going come knocking on your door and your rhetoric is not going to stop their anger. In the words of Jethro Tull, "It's only the giving that makes you what you are." You need to grow a heart. Capitalism is just a slogan smoke screen for taking, taking, taking while your brothers and sisters, mothers and fathers, suffer, suffer, suffer because you have too much, too much, too much. If you're wondering why there is massive poverty, look in the mirror.


Rayk 6 years ago

James -no doubt you can see a small technical hitch occurred,the golden rule of beeing attentive was broken.

You have confirmed my original impression on reading your hub-you are a gentleman,a scholar ,and by the grace of God a Christian.

I look forward to reading more of your work.

Much of what you say reflects the teachings in papal encyclicals in the modern era-more recommended reading for you.

The challenge is,to harness the dynamic of capitalism to the vision of Chiara Lubich's 'Economy of Communion'-the focus being on sharing the fruits of capitalism fairly.

Her vision- and she was a very practical woman-was inspired by seeing thousands of our brothers and sisters in Christ scavenging on the vast mountains of refuse,that surround Rio and many other Mega cities-like a crown of thorns.

.

.


itakins profile image

itakins 6 years ago from Irl

Sorry -screwed up here-setting this up for technophobe other half and forgot to sign out-ah well!!


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

OpinionDuck--- The government should not have massive bureaucracies, surely not at the federal level. People should be governed as close to home as possible, meaning that municipalities and states should have more power and the feds far less. Mostly, all of them should leave people alone. The federal government should provide for our common defense, and settle disputes between the states. Building and maintaining interstate highways; and controlling air traffic are nice jobs for them too.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

itakins--- You expressed yourself just fine both times. I always get you. And yes, RayK is pretty sharp, as well as having a good heart.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

richardheft--- Whoa!!! Slow down there, Adolph. You don't know me and therefore you are unqualified to decide if I am selfish or greedy. I am neither. The middle class isn't disappearing because of Capitalism. You missed my graphs on this page. Look at them closely. Capitalism created the middle class. The middle class is diminished because 50% of their income is confiscated by government. Capitalism is not a zero sum game--it is limitless. Socialism is a zero sum game, comrade.

Let old people starve to death? When did the last person starve to death in America? How many people starved to death in America in 1910? 1850? 1800? Private charity is the answer, not government confiscation. I am poor. I caused the poverty of the world? Wow! I had no idea I wielded so much power. Capitalism created virtually all the world's wealth. You must think the Soviet system was great. You would be mistaken.

If you tell every child in America that they don't have to accomplish anything in life because other people will accomplish enough for you to be taken care of from cradle to grave the whole country is going to be impoverished. You simply have no understanding of human nature. But that's OK. Maybe you can lead a Khmer Rouge movement and teach all who achieve something a lesson.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

Rayk--- I think I fixed the glitch. :)

I greatly appreciate your ideas. I agree with them. Naturally, we must love our neighbor. Who's our neighbor? Anyone we can see that we are able to help. That is our job, not the job of governments. Thanks much for your wise words.


Allan McGregor profile image

Allan McGregor 6 years ago from South Lanarkshire

An excellently written article and well argued position, James. However, I still agree with the commonly expressed position here, that America's success as a nation is due to her Judaeo-Christian heritage, because a Godly people can make even Capitalism work.

The equlivalence between Capitalism and democracy is thinnly drawn when we observe that modern democracy (of a sort) has its roots in ancient Athens, while Rome was a rabidly Capitalist society, founded firmly on military conquest and slavery.

Nineteenth Century Britain was famous for its 'Empire on which the sun never set', with a quarter of the nations on the world's map coloured in the Imperial red.

However, whilst the British Empire was radically Capitalist, Britain did not become a democracy until 1928.

And while Britain's American colonies broke away from the Mother Country in 1776 over the issue of 'No taxation without representation', the roots of that resentment go back to the Glasgow Tobacco Barons of the Seventeenth and Eightenth Centuries who enriched themselves enormously by despoiling the Virginia plantation owners through the astute extension of credit facilities which they used to enslave producers.

The reason Britain acquired a mighty empire was her insuperable and unquestioned naval superiority throughout the Nineteenth Century, backed by Government wealth distribution in maintaining the Royal Navy at enormous expense.

This was facilitated by the invention (by a Scotsman) of the Bank of England, which not only paid for the Royal Navy but invested heavily in Imperial enterprise.

The secret throughout was credit - the payment of current costs by borrowing from tomorrow, which has inevitably came to mean 'future generations'. And by and large the United States is no longer a wealthy nation, but a nation that has englittered itself with the trappings of wealth by maxing out the national credit card. In other words, the US has trillions of dollars more debt than it has assets to cover them. If you check the Byzantine anals of the banking industry, you will discover that America is sustantially and substantively 'owned' by China, and increasingly by India.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

Allan McGregor--- Thank you for the kudos, brother. I love what you said here:

"I still agree with the commonly expressed position here, that America's success as a nation is due to her Judaeo-Christian heritage"

Yes, you make great points about the history in Britain. So if Britain was not a Democracy it was at least Parliamentarian--a far cry from Socialist. Even America is of course a Republic, technically. So, these definitions may not be precise.

Your commentary is wonderfully written and full of interesting information. Thank you for coming by and adding much to the discussion.


Dog On A Mission 6 years ago

Depends how you define "Capitalism".

Ron Paul always makes the distinction between genuinely free trade (which is good) and corporatism (which is evil).

The only way to limit the "bad side" of capitalism is to limit government.

Monopolistic abominations like central banking, the military-industrial complex and anti-competitive regulation are the polar opposite of free trade.


stars439 profile image

stars439 6 years ago from Louisiana, The Magnolia and Pelican State.

Very interesting hub. I will have to read it very carefully again to fully comprehend all of it. It is such a wonderful piece of work, and a mini study in itself. It is good to be able to read this kind of hub without prejudices getting in the way of explaining them. You are excellent at keeping matters in pretty much unbiased perspectives. God Bless You.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

Dog On A Mission--- I am for Free Trade. There is nothing inherently wrong with a corporation. The entity itself is neutral. There are good and bad corporations--most are good. But I agree that government benefits some over others and it shouldn't. I totally agree with your last paragraph. You make good sense. Thank you for coming by and leaving your insights. Welcome to HubPages.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

stars439--- I do try to calls 'em as I sees 'em. What I am trying to do here is make the complex digestible. There is not much opinion here (maybe a little), mostly research. :D

Thanks for visiting and leaving your remarks.


BDazzler profile image

BDazzler 6 years ago from Gulf Coast, USA

"There is not much opinion here (maybe a little), mostly research." ... I think that's why those who are ideologically opposed to the obvious conclusions your research leads to so vehemently assault you. You know, with phrases like "Spoken like a greedy selfish person." It's much easier to attack someone's character, especially a stranger online, than it is to do their own research and come up with a good counter-argument.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

BDazzler--- Yes, those ad hominem attacks are hard to take and easy to give. As you say, they must suffice for those lacking in either analytical skills, or the art of articulation. You have a problem with neither. :-)


Allan McGregor profile image

Allan McGregor 6 years ago from South Lanarkshire

Correct James, the US is a Republic, not a Democracy.

The fundamental problem with democracy is democracy: Everyone gets to vote, which sounds good in theory except that most people do not vote for whoever will do the most good for the nation, but for whoever offers to do the most good for them personally, reflecting their own wants rather than the national need.

In a moral nation democracy could work, but a nation whose people are growing increasingly selfish, immoral, greedy, lazy and indolent will vote for Hilary Clinton.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

Allan McGregor--- Yes, a straight democracy can lead to an extreme version of populism favoring slick demagogues. hmmm . . . this sounds like what we have now! :D uh oh!

Yes, our Founding Fathers clearly thought that only a moral nation could be governed by the People.


Faustus 6 years ago

Vladimir Uhri - your religious delusions add nothing to this conversation.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

Faustus— Thank you for your pithy comment.


Josh Dusen 6 years ago

Interesting opinion, but I think that despite the all capitalism criticizm it is still the best known form of economy.


Jason R. Manning profile image

Jason R. Manning 6 years ago from Sacramento, California

Hi James,

Fantastic writing my friend.

To the doubters I would charge with proof of ideology wielded by governments. Let them pick their poison and then let them move to that region to experience what they ask for. It is so sad to see free citizens spill their subterfuge on our undeniably better system. Even with the limitations of elitist manipulating the rules of free trade, our government executes a mixed system of democracy, capitalism, Judeo Christian values with an increasing compromise of socialism. Why is it if we are so greedy, bad, and hateful, America is still the most desirable place on earth for the tired, hungry and poor?

Foreigners can see what pseudo-intellectuals refuse to see. Those with the means of safety, security and power are always the first to bite the hand that feeds them. Remove the warm blanket from socialist and they cry “give me, give me, give me what I haven’t earned you selfish capitalist.”

You are a gem James, we appreciate your teaching moments.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

Jason R. Manning— Hello. Thank you much for your kind compliments. Boy, you said a mouthful here:

"Why is it if we are so greedy, bad, and hateful, America is still the most desirable place on earth for the tired, hungry and poor?"

Why indeed. I also loved this:

'Those with the means of safety, security and power are always the first to bite the hand that feeds them. Remove the warm blanket from socialist and they cry “give me, give me, give me what I haven’t earned you selfish capitalist.”'

Say it again.


bskinny profile image

bskinny 6 years ago from US

Government cannot give what it does not have and government has nothing if it doesn't first take it from someone else.

There is no such thing as "government funded", it is all tax payer funded and the only way government can support itself is through taxing entrepeneurial minded capitalists and their employees. The only difference is, is it free market capitalism? or quasi socialist capitalism like some countries in Europe?

Sorry, James, I hope my comment was somewhat on topic


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

bskinny— Your comments are spot on! I love them, especially this:

"There is no such thing as "government funded", it is all tax payer funded and the only way government can support itself is through taxing entrepeneurial minded capitalists and their employees"

Beautifully said. I appreciate the visits and your comments.


James A Watkins profile image

James A Watkins 6 years ago from Chicago Author

Josh Dusen— I most certainly agree with you, friend. Thank you for offering your excellent opinion. I appreciate the visit to my Hub.


Don Simkovich profile image

Don Simkovich 5 years ago from Pasadena, CA

You made a valuable point that capitalism is not a static system. Also, the book The Millionaire Next Door shows ordinary people most often benefit from the rise in class -- become wealthy. I think the positives far outweigh the negatives. A friend of mine who is a professor is passionate about socialism and she is from Eastern Europe and felt where she's from socialism worked. But, she said, capitalism around the world fought against the socialism. Anyway, I need to do research on it. Good Hub.


James A Watkins profile image

James A Watkins 5 years ago from Chicago Author

Don Simkovich— Socialism worked in Eastern Europe? Boy, I have friends from Poland, East Germany, and the Czech Republic that surely disagree. I would be interested to know on what basis she makes this claim. Not the secret police I hope. :D

Capitalism did fight against Socialism in the Third World. I don't see where we interfered much behind the Iron Curtain.

I appreciate your excellent comments, Don. It's good to see you. Thank you for visiting.


wba108@yahoo.com profile image

wba108@yahoo.com 5 years ago from upstate, NY

Great insights! I like your statement that "only within capitalism is democracy possible". This is certainly true in that what capitalism is, is a free market and without economic freedom other freedoms mean much less. Also your point about the strain that regulation puts on the free market cost us more than we know, by increasing costs and creating perverse incentives. I've also noticed that when the word socialism is used around liberals, they dismiss it as ridiculous even though that's what they promote. What a terrific article and powerful good advise about the economy and our freedom's.


James A Watkins profile image

James A Watkins 5 years ago from Chicago Author

wba108@yahoo.com— Thank you for the laudations! I am grateful to receive your high praise indeed for my work on this article.

I very much appreciate this visit from you. Welcome to the Hub Pages Community. I totally agree with your remarks. You are spot on. Thanks again.


Alexander Mark profile image

Alexander Mark 5 years ago from beautiful, rainy, green Portland, Oregon

When compared the way socialism and capitalism have been compared here, it does seem that socialism requires that personal control be wrested away from the individual. To me, the eradication of personal freedom is the worst thing that can happen to anyone, yet there are plenty of people that love to follow and want someone to lead them around by the nose (am I sounding like an elitist now?). But I think that unhampered capitalism provides the opportunity for both groups to prosper.

What I found especially insightful was the connection you made between the increase in living standards and how this can culminate in the dissatisfaction of those that do not have what their successful peers have even though those that do not have, have more than they would have if there was no capitalism in the first place. True true!

As much as I hate my current situation (and station in life), I marvel at the fact that I own a vehicle (2 currently) have running water, shelter, my own sanitary bathroom, access to decent food and on and on. We have so much, but because we are used to it, we can easily see what we don't have.

I do like many aspects of socialism, but its one inherent problem is that it must take away freedom by means of a centralized control. If we're talking about capitalism not being fair, socialism isn't fair either.

You mentioned that those who are most likely to succeed are intelligent and energetic people. I am intelligent but lack energy - I don't know if I have some kind of problem and I don't care to label it, but it bothers me to see that my lack of energy hampers me from moving ahead. Isn't there a way to introduce some kind of compassion into a capitalistic society that allows those who can't fight to the top the chance to succeed in their own space? What I mean is that there are plenty of talented and willing people who cannot compete in a capitalist environment, but if given the right circumstances could contribute to society. I am not talking about welfare, just a way for people who aren't as able as the best of humanity to still have the space to contribute.

Still appreciate capitalism - I think the free market is the best catalyst for the advancement of humanity and civilization and creates the best environment for a people to enjoy prosperity and good living standards.

You mentioned briefly that it was not too long ago that people would save their money to make major purchases like a home, and now we must go into debt to buy almost anything. This does not seem like true capitalism: was it the failure of government regulation or an intentional change to national policy that allowed this situation to arise? Of course I am blaming the government ironically, just goes to show how locked my brain is into believing the propoganda that capitalism is what allows greed to prosper. Set me straight!

For me, I am struggling with the near necessity of buying a house with a loan vs saving up the money while paying rent. It's an awful trap.

Just some thoughts, great hub and stimulating as you can see.


mdimascio 5 years ago

Thank you James. A fine hub, but I find that your explanations of pros and cons lacks the content I was looking for. Specifically, I was interested in a discussion on theoretical negative outcomes that can arise. Specific examples would be the birth of too big to fail entities, the negative effect that minimizing costs can have on moving jobs overseas where labor might cost $2 a day per employee, the effects of minimizing costs by cutting corners on waste cleanup, the effects that seem evident of monopolistic behavior. Many other cons that you simply do not even hint at that can occur. I am very much for capitalism, however there are cons that we must not ignore in any endeavor.

I am studying recent negative events, and my desire is to determine if they are indeed inherent aspects of capitalism.

Thank you.


James A Watkins profile image

James A Watkins 5 years ago from Chicago Author

Alexander Mark— Thank you for visiting this older Hub of mine. I just now read it again myself and I enjoyed it. :)

You are right that some people do want to be told what to do and are bewildered by the array of choices we have here in America today. You can bet that in a Socialist economy you do not have 90 kinds of cereal to choose from.

I have known men who were in prison for a number of years and they were so used to being told when to get up, when to eat, when to shower, when do go to bed, that they actually missed the authoritarian figures.

This is a strategy of present day Marxists, to gradually increase governmental control and decrease freedom—one must go with the other—until people get used to the leviathan state telling them what to do and forget how to be self-reliant—and forget the joy of being independent.

And you made a great point about the so-called "losers" in the race of capitalism—they have more than they would have under socialism anyway but supposedly they would be happy because nobody else had more than they do. But that is not really true because under all systems you have the elite. The leaders of the USSR drove around in new Mercedes, ate caviar, lived in villas on the Black Sea, and had all the best looking chicks at their disposal. BUT they kept this hidden from the average Joe by keeping complete control over communications and information. In a Capitalist society we have a Free Press and everybody can see the rich folks with their stuff.

Just to elaborate further on this point, here is how envy and covetousness tell the tale. I saw a psychological survey done that showed 90 percent of people would be happy earning $50,000 a year if all their neighbors made $25,000; but only 10 percent would be happy making $50,000 a year if all their neighbors made $100,000.

The government under Jimmy Carter—and more specifically, the Federal Reserve—caused interest rates to rise to over 20 percent in the late 1970s. Suddenly, the habit of Americans to save money made no sense. If you saved a thousand dollars today, by the end of the year it was only worth $800. That is when Americans starting buying things on their future earnings. This way you but a car today for $3000 that a year from now will cost $3600 and you pay for it later with money that is only worth $2400 when you actually get it. This changed America's buying and saving and borrowing habits forever.

There is plenty that a sensitive soul can do to contribute to society without engaging in the rat race. You can serve the poor, you can produce art, you can grow your own food, etc. etc. etc.

People confuse capitalism with greed. I should say: they are purposefully confused by others who harbor a sinister agenda. Ambition=good. Greed=bad. There is a difference between the two. And for would be socialists I will add: Envy=bad. Covetousness=bad. Self-reliance=good. Independence=good. Freedom=good. Liberty=good. Totalitarianism=bad. Got it? :D

Thanks, my friend. I enjoyed your thoughtful and insightful comments. And I appreciate the visit and compliment.


James A Watkins profile image

James A Watkins 5 years ago from Chicago Author

mdimascio— You are quite welcome. Thank you for visiting my Hubs and taking the time to read my article.

I am sorry that I failed to cover some aspects of capitalism that you hoped to see here. I appreciate your fine remarks.

I do not believe any entity is too big too fail. I think the bailouts were a travesty of justice—a negation of something we must have in place: Moral Hazard. In fact, I think the ecnomy would have rebounded faster if we had let those entities fail. It would have been a sudden shock but I do not believe it would have lasted nearly this long.

As far as moving jobs overseas, do not listen to labor union propaganda. The very idea that an up and running plant with millions of dollars of machinery in place, a distribution system smoothly locked in, and a trained work force of hard workers, would be dumped by a company to save a couple dollars is ludicrously asinine. Especially if you consider the international shipping costs involved with overseas manufacturing plants built to serve American consumers.

Now if labor unions buy off legislatures with union dues to get closed shop rules in place where they effectively create a monopoly of available labor; and then go on strike ever other year to extort more and more money and benefits from their employers until finally men doing rudimentary work are making more than doctors and accountants and entrepreneurs—say $75 an hour—then companies have to move their production facilities. Not because of capitalism—because American consumers do not want $300 toasters and $1500 washing machines.

There is your monopolistic behavior: labor unions. Whose idea is labor unions? Karl Marx: Workers of the world unite!

Get rid of unions and you will see unemployment drop to nothing and quickly. And don't believe that Marxist crap that everybody will have to work for slave wages. Only 7 percent of the workforce is in a union now; are the other 93% working for slave wages? Hell no.


mdimascio 5 years ago

Thank you. Let me bring up some other examples that may be indicative of possible inherent negative attributes. First, the Apple iPhone 4s sold a record 1 million units the first day, and 5 million over the first several days. Apple is a US corporation, but not a single phone was manufactured here. Why? How many more Americans would have jobs if it was? Isn't it the cheap yet proficient labor in southeast Asia that we can't ever hope to compete with, given our standard of living?

Second, the latest CBO report on the distribution of household incomes from 1979 to 2007 indicates that the income of the top 1% earners in the US grew by 275%, while the income of the next 20% only increased by 65%. Extrapolating, doesn't this point to an eventual massive inequality in incomes as you go 20, 50, and 100 years into the future? This can't be a good thing, can it? There would eventually be a mountain of money for the wealthy and a huge remaining population that has nothing in common with them.

Thank you.


James A Watkins profile image

James A Watkins 5 years ago from Chicago Author

mdimascio— You are welcome. Thank you for coming back to further engage.

You very astutely asked this question:

"Apple is a US corporation, but not a single phone was manufactured here. Why?"

The answer is that American labor unions form a monopolistic hegemony over this segment of American labor that demands an unrealistic standard of wages as compared to what this level of labor is worth on a global market—but not only that but a level of compensation that not only exceeds that level of compensation but also what menial labor is truly worth anywhere in the world.

Regardless of the statitics you quote, the truth is that in a free market system, every man is always paid what he is worth. The Free Market is blind; it foresees no winners or losers, just as a race in the 100 meter dash foresees no winners or losers. And that, in my opinion, is how it should be.


Alexander Mark profile image

Alexander Mark 5 years ago from beautiful, rainy, green Portland, Oregon

Thanks for taking the time to read and respond to my long comment with one of your own - I always marvel that you try to answer everyone.

What was really interesting was what you wrote about the interest rate rise. You do maximize your spending by borrowing against the future, but if interest rates rise so rapidly, and it seems the norm that living wages do not rise at the same rate, then with interest from the loan and the cost of living increasing more than your annual raises, you come out probably the same way if you saved up to buy a product that is worth more than the money you saved up a long time before hand. What a vicious cycle!

I recently had a eureka moment when I realized that I would be perfectly happy buying a cheap piece of land and living in a decent mobile home to beat the life-enslavement that regular house buying puts you in. I'm only on this earth for another 40 years give or take, and if I can write and serve God and stay out of debt (I am saving so I can pay for my future home outright) and have shelter and food, I am better off than most of the world.

People really do confuse capitalism with greed. When I see the word, "capitalism," I now immediately think, "free market," and there is no better system to encourage prosperity.

And you're right about growing your own food and living differently. This is one of the reasons I love America, here you can be a bum, strive for prosperity or homestead or be whatever you want to be.

I like that you listed the values that affect any system.

Recently I ran across a picture of a grave stone explaining that a soldier was buried there that received a medal of honor for killing two enemy soldiers in battle, and then was kicked out of the military for, "loving a man." I think it was a remark about the fact that he was patriotic but that it undeservedly took a back seat over something as trivial as sexual orientation. But it was comparing socks to underwear if you ask me. To the military, to the American people, it did / does matter what your orientation is, and until recently, it was considered an affront to American people if you engaged in immoral behavior while serving (never mind the whoring that goes on when naval ship is docked especially, in foreign countries). So from MY point of view, someone who chooses to out themselves in the military is doing the same thing as pulling down their pants in church. It is all about perspective.

The same thing applies to the values you listed. Capitalism isn't inherently evil, but it can be abused by people who see things differently. However, if you want to be a pure socialist, then self-reliance = bad :-)


James A Watkins profile image

James A Watkins 5 years ago from Chicago Author

Alexander Mark— You are most welcome, my dear friend. I do the best I can. I do respond to every comment. As you can see, I run a bit behind in doing so because my 249 Hubs get about fifty comments a day. Whew! It is hard to keep up.

A stable currency is a must for Democracy/Capitalism to work. In fact, Marxists want to destabilize the economy as part of their strategy. When inflation gets really crazy, such as in Weimar Germany, people took wheelbarrows of cash to the bread store. Ever since democracies went off the Gold Standard this has been a problem. Do you know that a U.S. Dollar has diminished in value by 99 percent since the Federal Reserve was established in 1913?

Well, the word "Capitalism" was invented by Karl Marx and intended as a slur. I prefer Free Enterprise but today it pretty much means the same thing.

But Marx was wrong about nearly everything. He predicted that in America eventually a handful of people would own EVERYTHING. And as much as we hear about the gap between the rich and poor, he was dead wrong. As you probably know, tens of millions of Americans own their homes and tens of millions of Americans own their own businesses. Marx failed to see the rise of the entreprenuer class. And of widespread home ownership. And of the stock market, whereby over a hundred million Americans now own a piece of the publicly traded corporations, if only through pension funds, 401Ks, and IRAs.

You wrote: 'Recently I ran across a picture of a grave stone explaining that a soldier was buried there that received a medal of honor for killing two enemy soldiers in battle, and then was kicked out of the military for, "loving a man."'

My question would be: "How did anybody KNOW he "loved a man?' I think everybody's sexual proclivities should be a private matter. I do not care of you have a shoe fetish, or love to be beaten by a dominatrix, or love to have somebody crap in your mouth. But why not keep it to yourself?

Thank you for your well-reasoned commentary. I always enjoy it when we engage. Good man!


Alexander Mark profile image

Alexander Mark 5 years ago from beautiful, rainy, green Portland, Oregon

Whoops, I thought I responded to your last comment - I must have dreamed it, ha ha!

You're so right, no one needs to know what your orientation is in the military, but I would say that if you make it public, then it does become everyone's business. Those entertainment figures that I admire that are homosexual I have no problem with because they just quietly live out their lives (David Hyde Pierce comes to mind) and don't make a big stink about their preferences.

I'm afraid that I got away from the point we were commenting on: that values can negatively affect any system, whether it is capitalism or socialism, and that it really is a matter of perspective if you believe one is better than the other. But isn't Europe a mix of socialism and capitalism (or free market)?

I was using that gravestone example as a comparison. The two truths presented on the stone were not equal to one another, they were shock value statements meant to make think you should equalize these supposedly opposite sentiments (the military gives you a medal for killing another man, but kicks you out for "loving" another man). Maybe I went waaaaaay too deep there.

Anyway, I am not sure that socialism is as bad as we want to think it is because it imposes a necessary control on growth. I say necessary, because in America, the ideals of capitalism have been mixed with greed and produced a gluttonous amalgam. But the opposite perspective is that socialism leads to enslavement by the state.

I agree we are better off in many ways here. I know that I could not dream of homesteading in Europe the way I do here, with much less government interference on my property and my life.

But I see in the future the day is coming that that will change until we look like Europe. Which isn't all bad since I'd much rather live in Europe than Russia or China or Africa ;-)


jay 5 years ago

I believe in freedom and freewill but i also believe in standards and rules of discipline. I believe God gives us the power to get wealth. In America We are caught so much up on prosperity and blessings instead of God the blesser. No government shouldnot control everything but God set up government for his purpose. America is suffering financially because that forgot about two things Loving God and loving their neighbor. Lets stop all this fighting against each other and work together. Dont be like that rich man who built bigger barns but lost his soul over selfishness. I believe in the success of others but not success by destroying others. We need to repent in America we are in a backslidden state. It is not about democrats are republicans but about one nation under God We Trust. Not our money not our possessions but in Jesus Christ. We should be an example to the world not about a democracy but a theocracy. For you came in the world naked and you are leaving naked. The rich and poor shall meet their maker and will He say well done servant or depart i never knew you. Iam not against wealth or money but as Paul said in Timothy God said to the rich be rich in good works. Neither am I talking about enabling lazy people but giving is our answer to financial freedom according to the bible the number one selling book in the world not our man made laws and constitution that keeps getting ammended. God bless and remember bless God.


James A Watkins profile image

James A Watkins 5 years ago from Chicago Author

Alexander Mark— Yes, much of Europe has sort of a middle way, a combination of capitalism and socialism. And the socialist part is now causing the collapse of many of their economies.

I believe Socialism is a bad idea. It elevates the State over the individual, over the family, over local communities, and over religion. It makes people dependent upon the State. It always lowers the standard of living. It always denies freedom. It always make access to political power paramount for people. It always attracts bad actors to seize that power.

I have explained this better here:

http://hubpages.com/education/How-Socialism-Works...

Still, I sincerely appreciate your thoughtful and insightful remarks. Thank you for engaging with me on this topic. Your comments are excellent.


James A Watkins profile image

James A Watkins 5 years ago from Chicago Author

jay— You made some profound comments. You wrote:

"In America We are caught so much up on prosperity and blessings instead of God the blesser. . . . America is suffering financially because that forgot about two things Loving God and loving their neighbor. . . . We need to repent in America we are in a backslidden state."

Amen!

Thank you very much for sharing your deep thoughts with us here. Wow! You said much that needed to be said and you said it wonderfully. I appreciate this visitation. Well done!


Brian 4 years ago

Just wondering, can I use this as a source in my research paper? I'm only in 10th grade so the requirements aren't too strict. The source just has to be reputable. And when was this written?


James A Watkins profile image

James A Watkins 4 years ago from Chicago Author

Brian— Thank you for reading my article. Yes, you may use this for your paper. I would be honored. Thank you for asking. This was written 3/17/10 but intended to be timeless.


Alexander Mark profile image

Alexander Mark 4 years ago from beautiful, rainy, green Portland, Oregon

Looks like I missed your comment before because I don't think I read that hub you linked yet. I will definitely mosey over there and take a gander, I love learning more about the pros and cons between socialism and not-socialism (I don't think it's fair to elevate socialism to equate the principles of capitalism) er, a democratic republic. Thanks as always for your graciousness.


James A Watkins profile image

James A Watkins 4 years ago from Chicago Author

Alexander Mark— You are most welcome, my friend. I love you! Thank you for extraordinary remarks. Please do "mosey" over and take a gander at my other Hub about how socialism actually works in reality—not on paper or in ones head. :-)


Dolores Monet profile image

Dolores Monet 4 years ago from East Coast, United States

Hi James - I enjoyed reading the hub and enjoyed reading the comments as well. I feel that the perfect system is a fine balance. Capitalism is the best economic system, yet there does need to be some governmental influence. Just as the capitalists of the 1800's thrived, many did so by having slaves. The industries of the late 1800's created factories that were dangerous places to work while the workers lived in terrible conditions.

When Henry Ford built his factories, he paid his employees enough money that they could afford to buy his product, ensuring himself of a good and continuing profit. JP Morgan claimed that the top earners of a company should earn 20 times what the average worker earned. Yet today, the average CEO makes something like 264 times what the average worker makes. If people can no longer afford to buy stuff, where does that put capitalism? Seems to me that wealth is no longer created by production, but by manipulating money. Is that capitalism?


James A Watkins profile image

James A Watkins 4 years ago from Chicago Author

Dolores Monet— I apologize for the delay in responding to your most excellent remraks. I was away from HubPages for a week. And when I came back, I had 100 comments. So, I responded to the short, easy ones first. :)

I am glad you enjoyed reading this Hub. There is something to be said for balance in all facets of life.

The 19th Century Capitalists set up those factories at enormous expense, many times gambling huge sums of money on ventures that did not always succeed. Many of the people that came to work for them, came from the countryside, making a conscious decision to leave their farms or villages, sometimes out of economic neccessity, but oft times because they thought rural or small town life boring and they felt the allure of the excitement of the big cities. Many were completely illiterate and had no skills. In general, they earned three times as much in the factory as they had back home.

I agree that CEO pay is out of whack. As less as less people acquire the skills to run a major enterprise, they are more and more in demand. If anybody could successfully run Apple, CEO pay would go down. As it is, they negotiate the best contract they can, which is only natural. Just as the top brain surgeon makes far more than a street sweeper, it goes by supply and demand.

Your comments are extraordinary, as well as thoughtful and insightful. Thank you for sharing your point of view. I appreciate you reading this Hub. :-)


Dolores Monet profile image

Dolores Monet 4 years ago from East Coast, United States

Well you are so kind. Of course I may be naïve and just wish the best for everyone. I certainly don't thing that a street sweeper should make the same amount of money as a brain surgeon. And, of course, people went hog wild for a few years there, buying homes they could not afford, buying giant TVs on credit, and just being stupid. I think the mess we are in is the fault of all of us, but I feel that the decline of the middle class may not be good for the economy in general.

People made good money in the 90's because there were so many jobs, and not enough qualified people to fill them. Now, what with less jobs available, and many people applying for one job, workers suffer.

Let's remember that the capitalists of the late 19th century built and lived in homes that were like castles while the workers lived in squalor. The wealthy industrialists of places like Johnstown PA chose to keep up the fabulousness of their lavish life style and country club rather that repair the damn that broke and destroyed the city, killing many, a horrifying example of the hubris that comes with too much money and too much power.


James A Watkins profile image

James A Watkins 4 years ago from Chicago Author

Dolores Monet— I am glad you came back by. But oh no, I think you not naïve by any stretch. I wholeheartedly join you in wishing the very best for everyone.

Yes, people did go hog wild, blowing money left and right on credit—spending tomorrow's money on today wants. I was one of them and that is why I lost everything; house, car, everything went when the business went. My grandparents spent yesterday's money on today's needs. A little different strategy. :D

I am only slightly familiar with the Johnstown Flood. I had not heard before that public works were put off in order to build lavish homes. That is horrifying.

Power corrupts, and absolute power corrupts absolutely (Lord Acton, of course).

I think if we break down the leviathan in Washington DC, and devolve power back to the states, where it resided almost entirely before Woodrow Wilson; by a majority until FDR; and not centralized as it is now until LBJ, we can prosper again. There is way too much money in DC and all governments are corrupt by variable amounts. These days, they pass legislation in exchange for stock tips. Power needs to be as close as possible to the local community that is taxed and knows what its needs are better than bureacrats 1,000 miles away. A return to Federalism is what I am for. Let states compete for business and jobs.

Anyway, I enjoyed your comments. Your words ring true. Thank you for engaging me. :-)


Alexander Mark profile image

Alexander Mark 4 years ago from beautiful, rainy, green Portland, Oregon

I have been half following the comments here, but one thing really grabbed my attention - the entire last paragraph about returning power to the states YES! Although I had up until now considered "federal" a bad word because we have federal taxes and a federal government. Thanks as always for learnin' me.

The fact that state power has been taken by the central government has become the first reason I don't want to become a US citizen. Ironically, it is because I love America so much that I refuse to become a citizen of what is left of the country I love.


James A Watkins profile image

James A Watkins 4 years ago from Chicago Author

Alexander Mark— You are most welcome, my friend. I am all for a return to Federalism. Why should the atheist Marxists in DC bureaucracies have the power to reach down into every little hamlet in the most remote parts of the country and dictate to them how they should live?

I love America. It is fast becoming an entirely different place than its founders planned, and a decadent culture in a sick society that none of the men who shed blood in the War of Independence, the Civil War, and the Two World Wars would have willingly fought for, if you ask me. :D

Thank you my brother. I enjoy our little talks.

james


Vihgidghighgofgvjfggr 4 years ago

Hi people of the world


James A Watkins profile image

James A Watkins 4 years ago from Chicago Author

Vihgidghighgofgvjfggr— Thank you! Thank you very much.


Hady Chahine profile image

Hady Chahine 4 years ago from Manhattan Beach

Well written. Although I prefer capitalism over socialism, I do, however, contemplate the current state of the American economy. For instance, how should I embrace accepting the “cons” of our democratic society when our government failed to take appropriate actions to responsibly regulate the financial industry, which as we know was the catalyst that catapulted this country into the worst economic crisis since the Great Depression?


James A Watkins profile image

James A Watkins 4 years ago from Chicago Author

Hady Chahine— Thank you very much for reading my article and for your fine comments. Welcome to the HubPages Community! I look forward to reading some of your writings. I apologize for the delay in responding to your remarks; I have been away from HP for a while.

I think the Global Financial Crisis was caused by Socialism, as in the federal government forcing banks to loan billions of dollars to people with which to buy homes. The people in question had little or no down payment, lousy credit, shaky employment—people that in no way would banks loan a dime to if not forced at the barrel of a gun (which is the force that backs all governments). I wrote about this here:

http://hubpages.com/education/Mortgage-Crisis-caus...

    Sign in or sign up and post using a HubPages Network account.

    0 of 8192 characters used
    Post Comment

    No HTML is allowed in comments, but URLs will be hyperlinked. Comments are not for promoting your articles or other sites.


    Click to Rate This Article

    Menu

    Resources