Smidgey

Of course! Our nation, with free trade, would have access to a huge market of very cheap materials. We could build a massive manufacturing and service base out of this. If we are trading with this huge nation, our nation will have cheap products and the wealth of the nation we are trading with will rise. If you think both nations will decline, then you don't understand the capitalist system.

Japan employed free trade not so long ago (it doesn't have it anymore). It was next to China, it grew to become the second largest economy in the world as a result.

You do realise, that in order for a company, such as Nissan, to make the profits it does, it has to sell to wealthy Japanese workers. It is not in the collective interest of companies to harm their resident economies... Also, these companies will keep their headquarters in their home nation, due to free trade allowances, which are not available in an EU-like situation.

Japan has built a powerful service and manufacturing center, even with China nearby. The main difference being, China does not have free trade.

Hong Kong did it too and still does do it (it has the freest economy in the world). Next to massive China, Hong Kong has no problem.

Furthermore, you cannot pick and choose - you cannot apply capitalist principles in an EU-like situation, because if there is an EU-like situation, capitalism just does not exist.

Finally, the UK is not next to China. Capitalism can and will work in the real world, hypothetical nations don't disprove that. If we use thought experiments to create fictitious nations we can disprove almost any social or economic theory. We could argue against drug legalisation by making a nation where 90% of the population are already on drugs. The focus is not what might be the case, but what is the case.

Millennium3

I think you have missed my point to some extent. However, recalling that you are at University, I am beginning to wonder if the young of today have been indoctrinated by Adam Smith within the education system.

Amongst many of your age group there seems to be a total conviction that the raison d'etre of existance is the pursuit of wealth and for the economy of a nation to grow at the fastest rate possible and that a free market economy is some kind of heaven on earth for this to propagate.

Given a even start in a society where everyone had an equal share, over time raw capitalisism will redistribute that wealth so that the bulk would fall into the hands of a minority at the expense of the majority. However, we are not at that beginning, the bulk of wealth is already in the hands of the very few and the freer the market the quicker the bulk of what remains will be pass to the fabulously rich.

I know that it has been termed 'Selfish Capitalism' meaning that everyone should look out for their own personal interest, solely, however, if some kind of concern for your fellow man is shown, you would wish this 'tooth and claw' capitalism to be regulated by government so that wealth was distributed more widely. This to avoid a society that does not consist of a handful of fabulously rich and powerful, a small proportion of rich [the lieutenants of the fabulously rich and powerful] and the vast majority living at some kind of subsistance level and having to work long and hard each day. Because a nation has the largest economy in the world does not mean that the population share in it.

If you want to know from where the motive for this scheme stems - go down to the zoo and watch how 'group living' primates order their society. The single most powerful male at any one time will have the services of all or the vast majority of the females - this is its fundemental root - the total pursuit of sex and power. Surely during the time that we have come down from the trees we have learned to transmute this primordial power into something more sophisticated - usually described as civilisation.

Under capitalism, man exploits man. Under communism, it's just the opposite. JK Galbraith

Westcountryman

If anything, Universities go out of their way to indoctrinate students into being 'Liberal', anti-market, pro-Lefty Guardianistas.

__________________
Manus haec inimica tyrannis ense petit placidam sub libertate quietam - "This hand of mine, which is hostile to tyrants, seeks by the sword quiet peace under liberty."

Millennium3

I am sure that is where most teachers are coming from - I wondered if the syllabus they are obliged to teach was indoctrinated.

Smidgey

Completely agree!

Far from it. There is a huge left wing bias at university.

Firstly, the majority of my age group are idealists who believe the can make the world a better place through socialism. Secondly, I never claimed that capitalism would create heaven on earth. There will always be poor people, there will always be economic slumps, there will always be death. The question is not which system is best, but which system is least bad. I believe the least bad system is free market capitalism, not corporatism, not mercantilism, not socialism and certainly not communism.

Firstly, the majority had the wealth long before capitalism came along, we were not starting from an original position - government had bastardised that. In fact, when the supporters of Adam Smith finally convinced the UK government to enact free trade, not only did one of the biggest criminal elements in the UK cease to exist (smuggling), but the wealth of the average individual increased at a rate that has never been seen since. From an agrarian and poverty stricken society to an urbanised, industrialised superpower.

Secondly, if we all start at a position of perfect equality, I would much rather support the free system of Robert Nozick (justice in acquisition) than the socialistic system of John Rawls, which requires government force to redistribute wealth. I am not a fan of distributive justice in the Rawlsian sense. It is absolutely absurd to think that because person A gives some of his income to buy a product from person B that a third party (government) must enter the frame and re-balance the system by taking some of the money A gave to B and forcing B to give it back to A, ignoring the fact that a just trade took place.

Thirdly, I would like you to support your claim that capitalism would create a two tier society and I would also like you to tell me why it would be at the expense of the majority.

Again, this is reliant upon you proving what you believe capitalism will cause (as I asked in point three above).

Secondly, I am not a Randian. I believe in altruism. Who said anything about human nature being purely self interested? The capitalist system does not require everyone to be rational (like other systems) nor does it require them to be self interested. I can show concern for my fellow man by giving to charity or helping an old lady cross the road - I can not show concern for my fellow man by asking government to take money from some people and give it to me. Violence is not my thing, whether it comes from the gun of an individual or the many guns of the state.

Thirdly, if the majority would live in a detrimental state (as you claim), then the top tier of society could simply not exist. The reason Nissan is wealthy (to use an earlier example) is because tens of thousands of people can buy their cars. The reason Tesco is wealthy is because millions of Britons can buy their products. Without this lower base, the top tier (as you describe it) simply cannot exist.

Political power =/= economic power. I believe you are confusing the two. The problem for capitalism is not the capitalist system itself, but the power of the state. The key is to somehow invent a state where the government, with the influence of trade unions, business and other special interest, does not turn into a corporatist society and/or a socialist society (as we have today). I do not believe a democratic society can ever achieve this, since politicians are always required to pander in such a society.

Ohh! A quote game! I want to play!

"The problem of social organization is how to set up an arrangement under which greed will do the least harm, capitalism is that kind of a system."

Milton Friedman.

Millennium3

At the time of Adam Smith there was not the technology for wealth accumulation that there is today - capitalism has of course driven along healthy economies, but I would argue that it is better for governments to be in charge of the national interest because, in the West, democracy has kept some scrutiny on what transpires.

If the Capitalists become more powerful than governments, since there is no scrutiny the darkest practices are more possible. So in normal times capitalism regulated by governments is the best solution [this need not be necessarily be described as Socialism]

However these are not normal times. Technological advances have created the possibility of a New World Order that, by allying the owners of large corporations with governments, through the much vaunted globalisation to direct wealth, power and control into the hands of the very few - and the leading players are very keen and capable of producing this montrous creation.

My attack on capitalism is not simple trade in a fairly free market, but what it has become and where it now looks to be taking us.

I have no problem with valid quotes, however my attack does question the validity of the Friedman quote at our present time - whereas Galbraith's, I think, remain true.

Smidgey

Indeed, times do change. However, the economics of Adam Smith were only partially implemented (they have never been fully implemented) roughly 50 to 100 years after his death, when obviously times had changed greatly. Imagine what it was like fifty years ago and compare what it is like now, much less one hundred years ago. If the system is true, it will remain true. The system only appears to be defunct in a modern setting because liberal democracy has strayed so far from its original position. No longer are we sitting in a time when we can just revert back to pure capitalism. In order for any government to bring about a second birth of capitalism we would be expecting a decade or two of upheaval. Look what happened to Thatcher when she tried to implement just a few of these reforms. She did an above average job in some cases, but it still caused large social upheaval.

As to democracy, I do not agree that political freedom is in any way linked with social and economic freedom. Take India for example, it has very little social freedoms and although it is improving, it had next to no economic freedoms in the past. Despite being the worlds largest democracy, central planning and a caste system were the intellectual ideals of the time. Democracy in no way ensures freedom and it in no way ensures a check and a balance. In fact, often times it does quite the opposite - as is clear in the vast majority of Western democracies.

I would rather call it what it is - corporatism. If by government regulation you mean that it sit back and only intervene to redress grievances, injustice and instances of fraud, then I will agree with you. If you mean that government must regulate and control industry for the perceived benefit of the society, then I disagree.

A capitalist cannot become more powerful than government. A capitalist believes in a free enterprise system, free from government constraints. A corporatist, on the other hand, will fiddle his little fingers into government in order to secure the best system for him and his company. We often see this with companies such as Tesco, BA or Virgin.

The real problem (as I have mentioned above) is how to prevent this involvement, not how to make the state powerful enough that it can control industry, because history has shown - and will continue to show - that strong government will result in strong corporatism. Take the military industrial complex in the USA as an example. Eisenhower, in his farewell address, warned of how this complex could endanger freedoms and liberties. If only the American people had listened.

This is really answered above, and I will admit that it is a major problem. It happens today in our current system. If we have government regulating the markets it will happen (as it has happened). So this is not the solution. We need to find a way that forces government to stand back except in times of calamity (such as war or famine) or in redress of grievances. I, sadly, don't think it is going to be an easy task. We really need a Nozick, a Jefferson or a Mill to somehow rise to prominence in the UK and I for one don't see this happening any time soon.

Capitalism took us from the clutches of poverty and raised us to the mighty pillar of wealth, freedom and prosperity. Capitalism mixed in with government created corporatism and the position that we have today.

Well, now we are just going to have to agree to disagree!

kernow

Well said! Nail on head!

Millennium3

Yes......!

Smidgey

It will never happen.