capitalism and the nature of the universe
Jul. 1st, 2013 04:11 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
stormsewerAs a result of a Twitter discussion, I wanted to collect some of my thoughts on capitalism. In general, I like it. I think market solutions (which I consider to be more or less synonymous with crowd-sourced solutions) are usually better than attempts to micromanage problems top-down.
A lot of people on the left, particularly the far left, seem to think capitalism is a bad thing. Personally I don't see how you can think that way if you believe that the greatest good comes from providing the greatest amount of freedom to the greatest amount of people. (I more or less take that as a given in American society, though not necessarily in other countries.) Capitalism at its heart is quite simply the freedom of the people to determine the economy themselves. What's not to like? Why do you hate freedom? (I'm sorry, that line never fails to make me laugh, so I use it at every opportunity.)
Upon further questioning, it seems what they really have a problem with is monopoly, not capitalism per se. Because if capitalism is left unchecked, it turns into monopoly, which isn't really capitalism at all. To have real capitalism, people have to have the ability to break into the market. A competitive marketplace has to be maintained in order for capitalism to work its magic. It's almost ironic that uncontrolled competition leads to no competition, just like unlimited freedom easily leads to no freedom, because eventually someone competes well enough to keep everyone else from being to compete at all. The old adage that your freedom to swing your fist ends at the other guy's nose is a useful rule of thumb here, as it is in almost any discussion of freedom. In order to maintain a healthy capitalist system, the people who can provide the best products at the lowest prices need to be allowed to rise. The trick is that they then also have to be prevented from exploiting their position to paralyze anyone who might provide even better products at even lower prices. The system can't work when that's allowed to happen.
Capitalism is to monopoly what life is to death.
To which an anti-capitalist might reply, yes, that's right, and capitalism is bad because it will always lead to monopoly. Well, first off, I'm not sure the analogy holds that far, but it's hard to know for sure since we'd literally have to wait forever to find out if a properly controlled capitalist system is immortal. But even if the analogy does hold that way, that doesn't mean capitalism is a mistake, anymore than it means being alive is a mistake. It can do a lot of good while it lasts, and when it fails, well... You have to start over again.
This issue of failing and having to start over is not unique to capitalism or even to human society. Any complex system, be it an organism or an economy, has to find the right balance between order and chaos. Too much order and the system loses the ability to change, respond, and adapt. Which is death. Too much chaos and everything flies apart. Which is also death. Every complex system has to deal with this challenge, and the laws of thermodynamics seem to indicate that sooner or later all of them will lose their balance. Then destruction. And then the pieces are picked up, and something new is built.
It is very obvious that this is the case with organisms. But I think a look at history provides a fair amount of evidence that it is the case with governments and economies, as well. They may start with the best of intentions, with many people on board because the new system seems to have a better order/chaos (i.e., security/freedom) balance than whatever preceded it. But over time things inevitably get out of whack. Sometimes it's because things get too free-wheeling and things just can't hold together. But more often it's the opposite problem. The people who eked a bit more of an advantage in the beginning gradually press that advantage, collecting more and more freedom for themselves and letting the rest have less and less. This typically ends in one of two ways. The losers get fed up, revolt, and start the process over again. Or, the entrenched interests become so focused on getting theirs that they begin to pursue their own interests at the expense of the system as a whole, which inevitably crashes it, making room for something else to replace it. Of course, these paths tend to be intertwined.
So yes, capitalist systems tend to lead to outcomes like this. But that's less a problem with capitalism than with humanity, or with the fabric of the universe. To paraphrase Churchill, capitalism seems to be the worst possible economic system, except for all the other that have been tried. I think you'd be hard pressed to come up with a system that works better than a well-maintained capitalist democracy in the real world. The communists had a good go at trying to make people abandon self-interest entirely, but I think the 20th century provided pretty conclusive evidence that that only crashes things even faster. The best results seem to come from harnessing and controlling self-interest, not from trying to eradicate it. Cause erasing self-interest ain't gonna happen; it's just not how evolvable entities work.
Often the necessary course corrections can come without having to have whole system collapse. You don't always have to start over from scratch. Examples from 20th century American history include the economic controls that were put in place after the Great Depression, and the advances in civil rights. But yes, there are now some signs that the system is calcifying, that the winners are pushing things a bit too far. I'll be real curious to see if we can rein them in before the whole thing crashes down on us. It's an interesting time to be alive...
A lot of people on the left, particularly the far left, seem to think capitalism is a bad thing. Personally I don't see how you can think that way if you believe that the greatest good comes from providing the greatest amount of freedom to the greatest amount of people. (I more or less take that as a given in American society, though not necessarily in other countries.) Capitalism at its heart is quite simply the freedom of the people to determine the economy themselves. What's not to like? Why do you hate freedom? (I'm sorry, that line never fails to make me laugh, so I use it at every opportunity.)
Upon further questioning, it seems what they really have a problem with is monopoly, not capitalism per se. Because if capitalism is left unchecked, it turns into monopoly, which isn't really capitalism at all. To have real capitalism, people have to have the ability to break into the market. A competitive marketplace has to be maintained in order for capitalism to work its magic. It's almost ironic that uncontrolled competition leads to no competition, just like unlimited freedom easily leads to no freedom, because eventually someone competes well enough to keep everyone else from being to compete at all. The old adage that your freedom to swing your fist ends at the other guy's nose is a useful rule of thumb here, as it is in almost any discussion of freedom. In order to maintain a healthy capitalist system, the people who can provide the best products at the lowest prices need to be allowed to rise. The trick is that they then also have to be prevented from exploiting their position to paralyze anyone who might provide even better products at even lower prices. The system can't work when that's allowed to happen.
Capitalism is to monopoly what life is to death.
To which an anti-capitalist might reply, yes, that's right, and capitalism is bad because it will always lead to monopoly. Well, first off, I'm not sure the analogy holds that far, but it's hard to know for sure since we'd literally have to wait forever to find out if a properly controlled capitalist system is immortal. But even if the analogy does hold that way, that doesn't mean capitalism is a mistake, anymore than it means being alive is a mistake. It can do a lot of good while it lasts, and when it fails, well... You have to start over again.
This issue of failing and having to start over is not unique to capitalism or even to human society. Any complex system, be it an organism or an economy, has to find the right balance between order and chaos. Too much order and the system loses the ability to change, respond, and adapt. Which is death. Too much chaos and everything flies apart. Which is also death. Every complex system has to deal with this challenge, and the laws of thermodynamics seem to indicate that sooner or later all of them will lose their balance. Then destruction. And then the pieces are picked up, and something new is built.
It is very obvious that this is the case with organisms. But I think a look at history provides a fair amount of evidence that it is the case with governments and economies, as well. They may start with the best of intentions, with many people on board because the new system seems to have a better order/chaos (i.e., security/freedom) balance than whatever preceded it. But over time things inevitably get out of whack. Sometimes it's because things get too free-wheeling and things just can't hold together. But more often it's the opposite problem. The people who eked a bit more of an advantage in the beginning gradually press that advantage, collecting more and more freedom for themselves and letting the rest have less and less. This typically ends in one of two ways. The losers get fed up, revolt, and start the process over again. Or, the entrenched interests become so focused on getting theirs that they begin to pursue their own interests at the expense of the system as a whole, which inevitably crashes it, making room for something else to replace it. Of course, these paths tend to be intertwined.
So yes, capitalist systems tend to lead to outcomes like this. But that's less a problem with capitalism than with humanity, or with the fabric of the universe. To paraphrase Churchill, capitalism seems to be the worst possible economic system, except for all the other that have been tried. I think you'd be hard pressed to come up with a system that works better than a well-maintained capitalist democracy in the real world. The communists had a good go at trying to make people abandon self-interest entirely, but I think the 20th century provided pretty conclusive evidence that that only crashes things even faster. The best results seem to come from harnessing and controlling self-interest, not from trying to eradicate it. Cause erasing self-interest ain't gonna happen; it's just not how evolvable entities work.
Often the necessary course corrections can come without having to have whole system collapse. You don't always have to start over from scratch. Examples from 20th century American history include the economic controls that were put in place after the Great Depression, and the advances in civil rights. But yes, there are now some signs that the system is calcifying, that the winners are pushing things a bit too far. I'll be real curious to see if we can rein them in before the whole thing crashes down on us. It's an interesting time to be alive...
