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Why capitalism is failing, according to me - The Revolution of the Moon
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Thu, Feb. 10th, 2011 12:04 pm
Why capitalism is failing, according to me

1. The medium of exchange has declining marginal value, just like everything else.
2. Capitalism is uninterested in the distribution of leisure, except in the sense of negative space.
3. Recent technical innovations have focused on the distribution of utility with near-zero marginal cost through a barter economy due to excess demand for the medium of exchange, just as Say predicted.

Reading The Great Stagnation I can't help but see these three things reflected in his assertions about the decline of modern innovation. I don't see recent innovations as being unimportant to the vast majority of Americans, I see it as being unimportant to GDP. 78% of Americans have access to the internet, and increased social contact is valuable (even if GDP has historically been terrible at measuring social goods.) Some innovation probably has had a negative effect on GDP, as better and cheaper entertainment increases the marginal cost of non-leisure. The question of how capitalism functions in a world of sufficiency is not one I've seen any economists take up, but I think that in the future it is one the field is going to have to address, especially if gender equality becomes a widely-accepted and realized goal (which has so far limited population growth without dictatorial government intervention, though it is unclear if that would remain constant in a world where men became equal to women rather than women becoming equal to men.)

Oh, right, also that whole part where it's a descriptive tool and not a society or a religion, but people treat it as both. But that's a whole different kettle of worms; I'm just talking about the inconsistencies of their own world views.

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krinndnz
krinndnz
Krinn DNZ
Fri, Feb. 11th, 2011 07:44 am (UTC)

The thing that I keep coming back to, is the observation (sadly can't remember the source) that most capitalists, especially the ones trumpeting the praises of the free market, would rather not be capitalists as such. They would rather be rent-collectors, arbitrageurs, and such - because actual competition is difficult and risky. The richer someone gets, the lower the chances are they they're engaged in anything useful or capitalistic as such, and the higher the odds that they're actively preventing the capitalist model that they espouse, from functioning the way that they claim it should.

In such circumstances, why practice capitalism at all?


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