Is Capitalism the Best Economic System?

Timothy Schoonover

Is Capitalism the best economic system? If yes, why? If no, what is?

Results (total votes = 32):


Yes, Laissez Faire all the way.	2 / 6.3%

Yes, but federal regulation is needed.	16 / 50.0%

It's more like the least worse.	4 / 12.5%

No, its oppressive and exploitive in all forms.	6 / 18.8%

I'm a dummy!	4 / 12.5%

Dissident Heart

Parecon: Life After Capitalism by Michael Albert

From the
English Jacket:

How can we replace the economics of exploitation and greed with an economics of equitable cooperation and solidarity? How can we put people in charge of their own economic life, rather than being controlled by corporations and markets? How can we foster economic well-being that benefits the whole society, rather than engorgement of the few?

In this highly praised book, attracting worldwide attention and support, Michael Albert provides an answer: Participatory Economics, called parecon for short, is a new economy beyond capitalism. Parecon celebrates solidarity, equity, diversity, and people democratically controlling their own lives. To attain these values, it utilizes original institutions for production, consumption, and allocation, described throughout the book.

Quote:
Howard Zinn Comments: “I can't count the number of times when serious critics of our social system would say to me: ‘Why can't we come up with a vision of what a good society would be like?’ This is what Mike Albert boldly does in Parecon: Life After Capitalism, and the result is an imaginative, carefully reasoned description, persistently provocative, of how we might live free from economic injustice.”

For more information, including the table of contents, comments about the book, and an interview with the author, please continue below.

Quote:
Noam Chomsky Comments: “There is enormous dissatisfaction, worldwide, with prevailing socioeconomic conditions and the choices imposed by the reigning institutions. Calls for change range from patchwork reform to more far-reaching changes. Michael Albert's work on participatory economics outlines in substantial detail a program of radical reconstruction, presenting a vision that draws from a rich tradition of thought and practice of the libertarian left and popular movements, but adding novel critical analysis and specific ideas and modes of implementation for constructive alternatives. It merits close attention, debate, and action.”

Parecon: Life After Capitalism www.parecon.org/pelac.htm

Parecon: Participatory Economics www.parecon.org/

Edited by: Dissident Heart at: 3/25/04 12:21 pm

Timothy Schoonover

A lot of individuals ignorantly regard Marxism, Socialism, and Communism as essentially equivalent economic theories and refer to the lattermost as irrefutable evidence of their collective failure. Moreover, those who regard Communism as the only feasible alternative to Capitalism, interpret its failure as the fait accompli of Capitalism's validity. But is Capitalism the only valid alternative?

Michael Albert and Robin Hahnel in Socialism as it was Always Meant to Be suggest that "According to most economists, the activities of separate groups of producers and consumers can be coordinated by markets [Capitalism] or coordinated by authoritarian planning [Communism] — but there is no 'third way.'" They cite Alec Nore's comments in The Economics of Feasible Socialism as characteristic of this perspective. "In a complex industrial economy the interrelation between its parts can be based in principle either on freely chosen negotiated contracts [i.e., markets], or on a system of binding instructions from planning offices [i.e., central planning.] There is no third way."

However, through worker and consumer counsel's Parecon claims to be the third way which has hitherto eluded economists in their search for a practical socialist model.

This is my first exposure to the theory and I think it is well worth examining in greater detail. I am eager to see if it is capable of living up to its claims as I find capitalism rather detestible.

Edited by: Timothy Schoonover at: 3/25/04 4:50 pm

Dissident Heart

"What we have here is a form of looting... The rich don't need the money and are a lot less likely to spend it - they will primarily increase their savings. Remember that wealthier families have done extremely well in the US in the past twenty years, whereas poorer ones have done quite badly. So the redistributive effects of this administration's tax policy are going in the exactly wrong direction...I think this is the worst government the US has ever had." – George A. Akerlof, 2001 Nobel laureate who teaches economics at the University of California in Berkeley, in a July 29, 2003 interview with Der Spiegel (Berlin).

"A few people at the top are getting just enormous, enormous benefits," says economist and Nobel laureate Joseph Stiglitz, astounded at the 2003 Bush tax cut proposals. "You don’t need a Nobel prize to figure this out ...give money to people who will spend it. Link tax cuts to expenditure. For instance, expanded unemployment benefits, aid to states and localities, money to low wage workers, investment tax credits, in particular incremental tax credits, will direct money in areas where it will be spent."

"Excessive CEO pay is the mad-cow disease of American boardrooms. It moves from company to company, rendering directors incapable of applying common sense." – J. Richard Finlay, Center for Corporate and Public Governance (Canada,) quoted in Business Week, 5/6/2002

"All for ourselves and nothing for other people seems, in every age of the world, to have been the vile maxim of the masters of mankind." – Adam Smith, The Wealth of Nations, 1776.

"If we made an income pyramid out of a child's blocks, with each layer portraying $1,000 of income, the peak would be far higher than the Eiffel Tower, but almost all of us would be within a yard of the ground." – Paul Samuelson of MIT

"If you pour enough wealth into the funnel at the top, those at the bottom eventually receive a little of the benefits themselves. One might ask, what kind of decent society requires making the rich that much richer to prevent everyone else from getting poorer?" – Barry Bluestone and Bennett Harrison, Growing Prosperity, 2000

"Historically, some very successful societies have existed for millenia with enormous inequalities of wealth and income -- ancient Egypt, imperial Rome, classical China, the Incas, the Aztecs. But all these societies had political and social ideologies that fit this economic reality. None believed in equality in any sense -- not theoretically, not politically, not socially, not economically. Democracies have a problem with rising economic inequality precisely because they believe in political equality -- 'one person, one vote.'" – Lester Thurow of MIT, the New York Times, November 19, 1995

"Sustainability can be approached by 'lowering the top' more than by 'raising the bottom.' The strategy of 'raising the bottom' must be supplemented by 'lowering the top.' " – Economists Robert Goodland and Herman Daly, 1993 World Bank Working Paper

"Unlimited inequality is inconsistent with community, no matter how well-off the poorest are. Even relative poverty breeds resentment, and riches insulate and harden the heart. Conviviality, solidarity, and brotherhood weaken with economic distance." – Economist Herman Daly, Beyond Growth: The Economics of Sustainable Development (1996)

"I am hard-pressed to believe that this is a period where we've got a rising tide that has lifted all boats. There are millions of workers who have never seen the harbor, let alone even know what a boat looks like." – Stephen Roach, chief economist, Morgan Stanley

"The haves are on the march. With growing inequality, so grows their power. And so also diminish the voices of solidarity and mutual reinforcement, the voices of civil society, the voices of a democratic and egalitarian middle class." – James K. Galbraith, Created Unequal: The Crisis in American Pay (199

"We're becoming an oligarchic society, with an extreme concentration of wealth. This concentration of wealth is protected through a political process that's making it difficult for anyone but the monied class to have a voice." – Economist Edward Wolff, New York University, Too Much, winter 1999

"How does one put together a democracy based on the concept of equality while running an economy with ever greater degrees of economic inequality?" – Lester Thurow, MIT, Shifting Fortunes (1999)

"A company with temporary, above-average returns can enjoy a big stock run-up and windfall yields for its founders or owners. Some of this is due to skill, diligence, or foresight; some of it simply to luck -- the people who decided to invest early in Xerox or IBM rather than Studebaker; the people who had their savings in housing in the 1970s and in the stock market in the 1990s rather than vice versa." – Robert Kuttner, Everything for Sale (1997)

"Americans (or at least the top few percent of the income distribution) have gotten into a sort of arms race of conspicuous consumption that, like most arms races, consumes huge quantities of resources, yet in the end changes little." – Paul Krugman, economist, USA Today, January 13, 1998.

"Whether measured by wages, income or wealth, for 25 years the share of the privileged has increased, and everyone else (a roughly 80 percent majority) has become relatively worse off. We are truly in a second Gilded Age." – Juliet Schor, Harvard University, Shifting Fortunes (1999)

"Issues of equity and social cohesion (are) issues that affect the very temperament of the country. We are forced to face the question of whether we will be able to go forward together as a unified society with a confident outlook or as a society of diverse economic groups suspicious of both the future and each other." – William McDonough, chairman, Federal Reserve Bank of New York, 1998

"If the richest one percent of the population were receiving the same share of after-tax income in 1999 as it did in 1977, it would be receiving an estimated $271 billion less in income this year -- $226,000 less per household." – Isaac Shapiro and Robert Greenstein, Center for Budget and Policy Priorities, September 4, 1999

"Humans are social. We judge our own situations very much in comparison to others around us. It is not surprising that people experience less stress, more peace of mind, and feel happier in an environment with more social cohesion and more equality." – Harvard economist Juliet Schor, Rachel's Environment & Health Weekly, June 10, 1999

"I think it is a national crisis to have the income disparity we have in this country. It is wider than in any other industrialized nation in the world. There must be a national policy to address the widening gap between wages of workers and the enormous incomes of the wealthy. I think the greedy corporate owners have to be confronted with the fact that they are ignoring their most powerful resource -- their workers." – AFL-CIO President John Sweeney, Los Angeles Times, October 29, 1995

Timothy Schoonover

I'm doing a research paper of the same topic as this thread and was wondering if you might be able to recommend any literature?

Dissident Heart

Thanks to ZNet Reading Lists

Panic Rules
Robin Hahnel, South End
"For years, people have been asking what to read to understand the global economy, its institutions, its crises, the reasons for the particular forms it has taken and their effects — and what they can do about it. Is there really 'No Alternative,' as constantly proclaimed? Why these arrangements and principles, not others? Robin Hahnel has written that book: lucid, enlightening, deeply-informed, wide-ranging, and constructive. It's just what has been needed." —Noam Chomsky

Globalization From Below
Jeremy Brecher, South End
When tens of thousands of protestors brought the World Trade Organization in Seattle to a halt in November 1999, it marked the "coming out party" for a new global movement. Trade unionists, environmentalists, students, women's rights groups, and human rights advocates demanded an alternative to "globalization from above." As Newsweek commented, "There are now two visions of globalization on offer, one led by commerce, one by social activism."

Dark Victory
The United States and Global Poverty
by Walden Bello, Shea Cunningham & Bill Rau
As we enter the 21st century, many countries of the South are in a state of economic crisis, with once optimistic visions of the future cruelly dashed by rising mass poverty, inequality, and hunger. "Bello et al build their case with relentless scholarship. Even those who think they know the structural adjustment scenario inside our will be grateful to Bello for taking the toughest cases for examination." --Susan George

The Amoral Elephant
William K. Tabb, Monthly Review
In this overview of world capitalism, William K. Tabb confronts the prevailing view of globalization as the steamroller against which even the most powerful nations are helpless. Tabb describes how institutions like the International Monetary Fund and the World Trade Organization have focused on neoliberal goals, devising regulatory frameworks to provide greater freedom and opportunity for capital at the expense of social need.

Corporate Predators
Mokhiber and Weissman, Common Courage
Fifty-one of the world's biggest 100 economies are corporations, not countries. As the most powerful institution of our time, the multinational corporation dominates not only global economics, but politics and culture as well. But the mechanisms of corporate control and the details of corporate abuses have remained largely hidden from public perception -- until now.

Private Planet: Corporate Plunder and the Fight Back
David Cromwell, Jon Carpenter Publishing
This book shows that free trade is actually forced trade, depending as it does on the coercive efforts of powerful corporate and political elites in the rich countries of the north to prise open the economies of the south, and gain access to their plentiful natural resources, including cheap labour. There is also nothing ‘free’ about a system of trade which systematically degrades the environment and widens the gap between rich and poor.

Economic Fundamentalism
The New Zealand Experiment – A World Model for Structural Adjustment?
Jane Kelsey, Pluto Books, 1995
Since 1984, New Zealand has undergone the most radical free market reforms of any OECD country. The application of a set of untested economic theories to an unsuspecting population as government policy mirrored all of the key elements of structural adjustment programs. This is the country which The Economist praised for “out-Thatchering Mrs Thatcher”. New Zealand continues been held up by institutions like the World Bank and neoliberal governments the world over as a success story, a model for others to emulate.
But the radical economic transformation has led to massive social inequalities and a takeover of much of the country’s infrastructure by transnational capital. Jane Kelsey book debunks the claims made by adherents of this economic fundamentalism about the “success” of this experiment in a thorough critique of the social, political, economic impacts of this process.

ABCs of Political Economy
Robin Hahnel
A clear and concise presentation of how to understand the operations of capitalist economics. The best intro available. The best book available on the topic.

Labor and Monopoly Capital
Harry Braverman, Monthly Review
"Labor and Monopoly Capital is one of the most influential books of our time, and it deserves to be. This new edition will help a new generation of readers understand the forces that are now transforming work around the world." —DAVID MONTGOMERY

Capitalism and Its Economics
Douglas Dowd
Addresses some of the most crucial questions of the current era. ... Dowd brings formidable qualities to this challenging task. An impressive achievement.' --Noam Chomsky
A critical history of the relationship between economic thought and capitalism from 1750 to the present. The book examines the dynamic interaction of two processes: the historical realities of capitalism and the evolution of economic theory. ... The book includes biographical sketches and brief analyses of the major proponents and critics of capitalism throughout history, including Adam Smith, Thomas Malthus, Jeremy Bentham, John Stuart Mill, Karl Marx, Thorstein Veblen, Rosa Luxemburg, John Maynard Keynes, Paul Samuelson, Milton Friedman, and Eric Hobsbawm.

The Theory of Capitalist Development
Paul Sweezy, Monthly Review
The classic presentation of Marxist economic theory...

Fat and Mean
David Gordon, Free Press (1996)
Brilliant left analysis of the wage squeeze, corporate bloat, and the real causes (top-down capitalist class warfare and not the "skills gap," "globalization" or the dysfunctional culture and behavior of the poor) of American poverty and inequality, 1970s-1990s. Great book. Readable and sophisticated all at once.

A Quiet Revolution in Welfare Economics
Michael Albert and Robin Hahnel
This book is online, on ZNet, for your access - a technical study of markets and economic institutions more generally.

Naturyl

Quote:
Is Capitalism the Best Economic System?

No, I think not.

A sensible mix of capitalist and socialist elements is much better, IMO. Laissez Faire is nasty, dehumanizing stuff, but a market that is to a greater or lesser degree free seems necessary for adequte wealth production. As in all things, moderation is key. There has to be a "happy medium."

"No nirvana without samsara; no samsara without nirvana." -Nagarjuna

sandor at the zoo

The best economic system yet produced is capitalism, but it needs a few social controls on it to prevent, as Naturyl says, "nasty, dehumanizing stuff". But just a few. As few as possible.

Dissident and Tim can read all of the books, cite all of the studies, and quote all of the experts they'd like to. I'm the first to agree that reading and research are necessary things.

But just as important - more important, in my opinion - is observable evidence from the real world. You see, the thing about citing the "experts" and the studies is that for every one you find who says "x is better than y" you can also find one who says "y is better than x". This is why "arguments by authority" are generally so weak; there are authorities out there who will say whatever you like. You just have to find the right one (and Dissident, unsurprisingly, has found plenty who say precisely what he wants to hear). In the end, all you'll accomplish with such activity is this sort of exchange:

"Professor A of University B says C."

"Oh yeah? Well Professor D of University E says F."

"So what? Dr. G of the H Research Institute found I, J, and K."

"Nonsense, Dr. G was refuted by Professors L and M of N Memorial Hospital."

And so on, and so on.

But the real world is not so open to interpretation and rhetorical word-shuffling. Is capitalism the best economic system? Well, look at the real world and ask the appropriate questions: When compared to other systems, are capitalist nations generally better places to live? Who went to the moon, capitalists or socialists? Who cured polio (and smallpox, and TB, and dozens of other diseases that have killed and crippled us since we lived in caves)? Who invented the airplane, the telegraph, and the computer? Who instituted the worlds first disaster-relief agency? Which nations give money and other aid - billions upon billions of dollars worth every year - to less fortunate countries?

Reading and research are fine. I'm a student myself. But they can not replace the lessons taught by the real world. Ever.

S

Timothy Schoonover

I don't know about you Sander, but I don't think the rest of us are in any position to implement and empirically evaluate a theoretical economic system. I mean, thanks for the advice, but I think I'll continue to participate in the 'rhetorical word-shuffling' until I have persuaded or been persuaded by enough people who are willing to try something that just might be better.

Also note, that the original question did not ask if Capitalism was the best existing economic system. I'm glad that you think that it is; however, that is not what we are discussing.

Dissident Heart

Sandor's attempt at apolgetics is as fine as any Christian project for defending exclusive rights to human enlightenment, while rationalizing away a world full of inhumane brutalities.

Which makes sense, because, Capitalism is a religion...one with it's own omnipotent, omniscient, and omnibenevolent deity creatively named "The Market"- that demands an entire lifetime of sacrifices at altars spread across the planet, and with the IMF and World Bank hard at work implementing more and more "structural adjustments" to third world countries- we can bet missionaries like Sandor will forever be in business.

And, like most Missionaries, no sacrifice is too large or too costly in order to appease his jealous God.

And like many believers of his ilk, those who live lavishly in wealth and prosperity do so because of their virtuous sacrifices made to the holy God...they are rich because they are good; whereas the poor are poor because they are bad, or ignorant heathen, or wretched pagans, or they worship false gods and deserve their miserable fates.

Sandor is never, I repeat, never willing to recognize the true, real cost of Capitalism in the world- I suspect it is because he lives inside the Castle walls, where life is relatively safe and secure, (although he is probably in severe denial about most American Successes ).

Whatever pleasure, enjoyment, enlightenment and progress attained behind the Castle gates comes at a profound cost for those unfortunate enough to live in the hinterlands. And, those living in the hinterlands can almost always find a direct corelation between the hell they are immersed in, and the heaven locked safely away in the Castle.

sandor at the zoo

Actually, Tim, your original poll simply asked what we thought the best economic system was; the additional stuff about a "theoretical economic system" came later. I was really just responding to that question.

I added the "existing" qualifier simply because any rational discussion of the subject requires it (at least in my opinion). It's like asking "Is the best spaceship we have the space shuttle?" Well, yeah, of course it is, but it won't always be. Any reasonable answer to the question demands you qualify it with a nod to the unknown future.

As for your "theoretical economic system" I can only say that many forms of socialism have been attempted in the past, from Hitler's warped "national socialism" to Stalin's hard-line communism to present-day Europe's "social democracies". Some were more successful than others - I'm sure Finland is a decent, boring place to live - but all have failed to compete with capitalism in any of the arenas that ultimately matter.

Because of the constant underperformance or outright failure of the concept as a whole, any "new socialism" is quite suspect. And like anyone making a suspect claim, the burden of proof lies on them, not the folks they're trying to convince. It's not up to capitalists to show that your new socialist concept doesn't work, it's up to socialists to show that it does work.

Furthermore, the evidence required is real-world evidence. Capitalists - because we're all such rotten, exploitative opportunists - are going to ask you to show a working macroexample of the system at work. "It looks good on paper" isn't going to cut it, because socialist theory has already crippled dozens of societies and killed untold millions of people. Capitalism certainly isn't perfect, but it cured smallpox and put men on the moon - which is a hell of a lot better than the gulags and killing fields that various socialist regimes have enriched the world with.

S

Chris OConnor

Dissident Heart

Quote:
So, let me get this straight, in a discussion link involving the value and worth of Capitalism as an economic system, introducing the ideas of economists, social theorists, political commentators, business leaders and labor leaders, a few anarchists to boot, as well as nobel laureates...these voices are unwelcome, burdensome, and slow the discussion down?

You aren't simply providing relevant links. You're posting primarily other peoples opinions. As the owner of this community I have certain responsibilities - some of which you might not appreciate. On numerous occasions people have suggested you refrain from posting so many quotes and excerpts as it becomes spam after awhile.

The majority of your posts are not your own words. Some members have become frustrated with this and have discussed it in the chat room. For their own personal reasons they don't seem to want to bring it to your attention. Perhaps they don't want to deal with your sarcastic responses. Unfortunately, I have the responsibility of being the messenger.

Do as you wish, but you might have more success if you made your posts a little more personal and wrote them yourself. We all have access to the same books you do. If we wanted to read them we would. And most people certainly don't want to debate the authors you are quoting. I sure don't understand why this is such a challenge for you, and why I have to now anticipate anot


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