Difference between revisions of "Capitalism"

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* People-Centered Economic Development
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* [[People-Centered Economic Development]]
  
 
"Economics, and indeed human civilization, can only be measured and calibrated in terms of human beings.  Everything in economics has to be adjusted for people, first, and abandoning the illusory numerical analyses that inevitably put numbers ahead of people, capitalism ahead of democracy, and degradation ahead of compassion."
 
"Economics, and indeed human civilization, can only be measured and calibrated in terms of human beings.  Everything in economics has to be adjusted for people, first, and abandoning the illusory numerical analyses that inevitably put numbers ahead of people, capitalism ahead of democracy, and degradation ahead of compassion."
 
(From the Manifesto for People-Centered Economics)
 
(From the Manifesto for People-Centered Economics)
  
The white paper for People-Centered Economic Development was delivered to the Committee to re-elect the (US) President in 1996 following an invitation made to P-CED founder Terry Hallman, to serve as an honorary member of the steering committee. P-CED was first deployed in Russia in 1999 to source the Tomsk Regional Initiative for USAID
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The white paper for People-Centered Economic Development was delivered to the Committee to re-elect the (US) President in 1996 following an invitation made to P-CED founder Terry Hallman, to serve as an honorary member of the steering committee. P-CED was first deployed in Russia in 1999 to source the Tomsk Regional Initiative for USAID."
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(http://people-centered.net/Capitalism.aspx)
  
  
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* Constructive Capitalism - Umair Haque
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* [[Constructive Capitalism]] - Umair Haque
  
 
"Why is industrial era business so destructive - why does it slash and burn rainforests, endanger entire species, vaporize culture and community, marginalize the poor and disadvantaged, and erode our health and vitality?  
 
"Why is industrial era business so destructive - why does it slash and burn rainforests, endanger entire species, vaporize culture and community, marginalize the poor and disadvantaged, and erode our health and vitality?  
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"20th century capitalism, in other words, marginally valued pure financial capital too highly, while marginally valuing human, natural, social, and cultural capital at zero - or, at the limit, negatively."
 
"20th century capitalism, in other words, marginally valued pure financial capital too highly, while marginally valuing human, natural, social, and cultural capital at zero - or, at the limit, negatively."
 
(http://people-centered.net/Capitalism.aspx)
 
(http://people-centered.net/Capitalism.aspx)
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=Discussion=
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==Point of view of [[Binary Economics]]==
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"An economic/financial system where a relatively small number of individuals own the vast bulk of capital assets, and where the majority of the population is employed at a wage and owns little or no capital.
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Louis Kelso used the term "capitalism" (or "universal capitalism") to describe a free market system where capital (as opposed to labor) is the predominant factor of production, and where there exists the widest possible distribution of private ownership of capital among the households of the economy. For semantic and philosophical reasons, however, a growing number of binary economists have rejected any use of the term "capitalism" to describe the logical alternative to traditional capitalism and socialism. (See Just Third Way.)
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The term "capitalism" was invented as a pejorative by socialists, not by Adam Smith or other pioneers of free market economics. Advocates of the "Just Third Way" assert that where socialism as a socio-political system reflects the "institutionalization of envy," capitalism represents the "institutionalization of greed." While the word "capitalism" retains some degree of respectability within the United States and other developed countries, it has become increasingly disparaged by opponents of globalization and many citizens in the developing world.
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Capitalism is often confused with "free markets" or "democracy," but in practice has historically resulted in mercantilism, concentrated power and monopoly. So-called "democratic capitalism," as some have labeled America's socio-economic system, has fostered an unstable, conflict-prone and class-divided combination of political democracy and economic plutocracy. While many defenders of democratic capitalism share with binary economists support for limited economic power of government, establishment of free markets and free trade, and restoration of private property rights, they generally treat universal access to capital ownership as irrelevant politically and economically.
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Expressed as an "ism," "capital-ism" connotes an ideology or value system that places its highest value on capital (or "things"), ranking it higher in importance than labor (or human beings). From the standpoint of binary theory itself, the term fails to acknowledge the interdependence and respective contributions of both capital and labor, with the distribution of incomes to both factors determined by market principles as well as principles of economic justice.'
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(http://www.cesj.org/definitions/glossary.html)
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[[Category:Business]]
 
[[Category:Business]]

Revision as of 11:19, 22 August 2011


Characteristics

Inherent Growth Characteristics of Capitalism

Richard Smith:

"1. Producers are dependent upon the market: Capitalism is a mode of production in which specialized producers (corporations, companies, manufacturers, individual \producers) produce some commodity for market but do not produce their own means of subsistence. Workers own no means of production, or insufficient means to enter into production on their own, and so have no choice but to sell their labor to the capitalists. Capitalists as a class possess a monopoly ownership of most of society’s means of production but do not directly produce their own means of subsistence. So capitalists have to sell their commodities on the market to obtain money to obtain their own means of subsistence and to purchase new means of production and hire more labor, to re-enter production and carry on from year to year. So in a capitalist economy, everyone is dependent upon the market, compelled to sell in order to buy, to buy in order to sell to re-enter production and carry on.


2. Competition is the motor of economic development: When producers come to market they’re not free to sell their particular commodity at whatever price they wish because they find other producers selling the same commodity. They therefore have to “meet or beat” the competition to sell their product and stay in business. Competition thus forces producers to reinvest much of their profit back into productivity-enhancing technologies and processes (instead of spending it on conspicuous consumption or warfare without developing the forces of production as ruling classes did for example under feudalism): Producers must constantly strive to increase the efficiency of their units of production by cutting the cost of inputs, seeking cheaper sources of raw materials and labor, by bringing in more advanced labor-saving machinery and technology to boost productivity, or by increasing their scale of production to take advantage of economies of scale, and in other ways, to develop the forces of production.


3. “Grow or die” is a law of survival in the marketplace: In the capitalist mode of production, most producers (there are some exceptions, which I will note below) have no choice but to live by the capitalist maxim “grow or die.” First, as Adam Smith noted, the ever-increasing division of labor raises productivity and output, compelling producers to find more markets for this growing output. Secondly, competition compels producers to seek to expand their market share, to defend their position against competitors. Bigger is safer because, ceteris paribus, bigger producers can take advantage of economies of scale and can use their greater resources to invest in technological development, so can more effectively dominate markets. Marginal competitors tend to be crushed or bought out by larger firms (Chrysler, Volvo, etc.). Thirdly, the modern corporate form of ownership adds irresistible and unrelenting pressures to grow from owners (shareholders). Corporate CEOs do not have the freedom to choose not to grow or to subordinate profit-making to ecological concerns because they don’t own their firms even if they own substantial shares. Corporations are owned by masses of shareholders. And the shareholders are not looking for “stasis”; they are looking to maximize portfolio gains, so they drive their CEOs forward.

In short, I maintain that the growth imperative is virtually a law of nature built-into in any conceivable capitalism. Corporations have no choice but to seek to grow. It is not “subjective.” It is not just an “obsession” or a “spell.” And it cannot be exorcised. Further, I maintain that these theses are uncontroversial, even completely obvious to mainstream economists across the ideological spectrum from Milton Friedman to Paul Krugman. But Herman Daly, Tim Jackson and the rest of the pro-market anti-growth school of ecological economists must deny these elementary capitalist rules for reproduction because their project for a “steady-state” eco-capitalism rests on the assumption that capitalist economic fundamentals are not immutable, that growth is “optional,” and thus dispensable." (http://www.paecon.net/PAEReview/issue53/Smith53.pdf)


Source: Critique of Steady-State Capitalism. Richard Smith


Definitions of other 'ethical' visions of capitalism

Collated by Jeff Mowatt:


"Economics, and indeed human civilization, can only be measured and calibrated in terms of human beings. Everything in economics has to be adjusted for people, first, and abandoning the illusory numerical analyses that inevitably put numbers ahead of people, capitalism ahead of democracy, and degradation ahead of compassion." (From the Manifesto for People-Centered Economics)

The white paper for People-Centered Economic Development was delivered to the Committee to re-elect the (US) President in 1996 following an invitation made to P-CED founder Terry Hallman, to serve as an honorary member of the steering committee. P-CED was first deployed in Russia in 1999 to source the Tomsk Regional Initiative for USAID." (http://people-centered.net/Capitalism.aspx)


  • Creative Capitalism - Bill Gates

"We are living in a phenomenal age. If we can spend the early decades of the 21st century finding approaches that meet the needs of the poor in ways that generate profits and recognition for business, we will have found a sustainable way to reduce poverty in the world. This task is open-ended. It can never be finished. But a passionate effort to answer this challenge will help change the world."


"Why is industrial era business so destructive - why does it slash and burn rainforests, endanger entire species, vaporize culture and community, marginalize the poor and disadvantaged, and erode our health and vitality?

"Because none of those have value in an industrial economy: none are capitalized. So the beancounters of the world are free to plunder and ruin them - because, economically, they actually don't exist.

"20th century capitalism, in other words, marginally valued pure financial capital too highly, while marginally valuing human, natural, social, and cultural capital at zero - or, at the limit, negatively." (http://people-centered.net/Capitalism.aspx)


Discussion

Point of view of Binary Economics

"An economic/financial system where a relatively small number of individuals own the vast bulk of capital assets, and where the majority of the population is employed at a wage and owns little or no capital.

Louis Kelso used the term "capitalism" (or "universal capitalism") to describe a free market system where capital (as opposed to labor) is the predominant factor of production, and where there exists the widest possible distribution of private ownership of capital among the households of the economy. For semantic and philosophical reasons, however, a growing number of binary economists have rejected any use of the term "capitalism" to describe the logical alternative to traditional capitalism and socialism. (See Just Third Way.)

The term "capitalism" was invented as a pejorative by socialists, not by Adam Smith or other pioneers of free market economics. Advocates of the "Just Third Way" assert that where socialism as a socio-political system reflects the "institutionalization of envy," capitalism represents the "institutionalization of greed." While the word "capitalism" retains some degree of respectability within the United States and other developed countries, it has become increasingly disparaged by opponents of globalization and many citizens in the developing world.

Capitalism is often confused with "free markets" or "democracy," but in practice has historically resulted in mercantilism, concentrated power and monopoly. So-called "democratic capitalism," as some have labeled America's socio-economic system, has fostered an unstable, conflict-prone and class-divided combination of political democracy and economic plutocracy. While many defenders of democratic capitalism share with binary economists support for limited economic power of government, establishment of free markets and free trade, and restoration of private property rights, they generally treat universal access to capital ownership as irrelevant politically and economically.

Expressed as an "ism," "capital-ism" connotes an ideology or value system that places its highest value on capital (or "things"), ranking it higher in importance than labor (or human beings). From the standpoint of binary theory itself, the term fails to acknowledge the interdependence and respective contributions of both capital and labor, with the distribution of incomes to both factors determined by market principles as well as principles of economic justice.' (http://www.cesj.org/definitions/glossary.html)