The problem is that everybody is having strong opinions about capitalism without even considering that it is not a "thing" but a category based on its definition, and there are multiple definitions of it.
The anti-capitalist, Marxist definition largely rests on private property (somehow) meaning you own more stuff you work with. Other people don't own the stuff they need to work with, so they need to "sell out" and become your employees. A typically capitalist company for a Marxist would be one guy owning 100 taxicabs and hiring 100 (or rather 300, in 3 shifts) drivers. Here the drivers, not having money to buy their own taxi cabs, must rent themselves out as employees. This is partially exploitative. Often Marxists propose it is not coming from free-market outcomes, but often it is more like some folks rob people with violence e.g. rob natives of their land then hire them when they have no other way of making a living. Another important aspect of a Marxist theory is alienation. The way I understand it, if the driver owns his taxi cab, he uses his own value system to work. Sometimes he is driven by the profit motive. Sometimes he gives rides to friends for free....
You can 3D print plastic. You can't 3D print computer chips. There are economies of scale with creating computer chips. The same is true for creating batteries. Tesla builds it's gigafactory because the huge volume allows cheaper production.
If I look over the items in my flat no one that can be 3D printed by a makerbot springs out.
Owning a solar rooftop means owning capital that produces a return. It doesn't make that energy free. If energy costs would be near zero I would use much more energy. Having a market that sets prices on energy use prevents people from wasting it.
The question presupposes that capitalism is the only way we organize our society. That's far from the case.
Not every transaction of value happens the same way. When government tries to solve a problem it does it through huge bureaucratic hierarchies. If I ask a friend to help me move to another flat then I the default isn't monetary payment. When open source is distributed for free on the internet you have yet another framework for value exchange.
Our society mixes different systems of value transfer. Wikipedia doesn't work through market incentives and that's okay. It can assist alongside with Britannica. There's no need for either-or.
I used to view capitalism as an inherent part of the society we currently live in, with no real economic competition.
I think it's best to approach this by asking what capitalism is. I see it as a distributed computing resource allocation system.
That is:
Decision-making is decentralized. Each agent has private information and communicates with the market through 'prices.'
Actual decision-making / computing is going on; agents are choosing between alternatives, constructing portfolios, gathering information, and so on.
There are some scarce resources that could be used to satisfy multiple different desires, but there's not enough to satisfy all desires.
You can construct an alternative by flipping those descriptions. For example, rather than a decentralized system, you could have a centralized system. This is empirically worse off, because we don't have easily scalable centralized computing, and information transfer is hard. (If you've already got billions of biological computers running around, why not make use of them?)
A zero marginal cost society is one in which we can satisfy all desires, without ever having to face tradeoffs between those desires. While this could eventu...
when you can get your goods, energy and communications for basically free, doesn't that undermine the whole capitalist system?
Goods that can be produced for zero marginal cost per copy but have a positive fixed/sunk cost (like software) pose a challenge for any economic system including capitalism because you need a way to pay for the fixed costs but you want to let anyone who gets any value from the good get it. But capitalism, I believe, offers to best hope in part because of capitalism's creativity. In the past advertising revenue was found to be ...
Disclaimer: If I'm wrong about something, I appreciate corrections, but please don't be an asshole about them. I know myself not to understand economics very well.
When something is as ubiquitous, as pervasive, as well-supported, as institutionally-backed as capitalism, you have to make significantly better arguments against its use than the mere fact that it has some obvious inefficiencies in some branch of it. Capitalism can wreak ruin among large swathes of the world, for all people care about. That still wouldn't stop them for doing their damnedest to p...
Capitalism is less truly an economic system and more truly an economic modeling language.
Natural fisheries versus farming provides an excellent illustration of this; if you followed the sames rules for "unregulated" natural fisheries (that is, anybody may catch any number of fish) in farming, whoever picked a vegetable would own it, and farming couldn't exist as it does today. But replace the fishery rules with the farming rules, and whether or not it is "capitalism" is determined wholly by the framing; if you charge for a limited numb...
In it, the author states that we are in the midst of a third industrial revolution as a result of a new energy/production and communications matrix i.e. renewable energies, 3-D printing and the internet.
Even if Rifkin was right about manufactured products and energy becoming ~free, that leaves about 70% of the US economy that remains not-free, i.e. the service sector. You can't 3D print a dentist or plumber.
In any case I greatly doubt that 3D printing will be cheaper than current manufacturing. A 3D printer is not a nanofactory, and won't be anytime so...
when you can get your goods, energy and communications for basically free, doesn't that undermine the whole capitalist system?
Ask me that when I actually would be able to get my goods, energy, and communications for basically free.
I'm not holding my breath.
By the way, the traditional name for this sort of arrangement is "communism".
There will always be ways to lower the marginal cost of a product. Even if this cost is measured in atoms, people will be looking for ways to reduce that cost.
There will also be art for a very long time. When everyone has a practically infinite supply of goods at their disposal, they will still want to create things for status, and this will be instantly transferable around the world. The internet increased the supply of art even as it reduced the marginal cost while leaving fixed costs mostly untouched.
There will be limits to transportation. Right now, that theoretical limit is the speed of light. People may compete for the right to travel to a far off world or to reach new worlds faster.
The biggest issue I see with unregulated capitalism is its poor handling of the tragedy of the commons. (in the shape of global resources)
The situation isn't so that we first had a theory of capitalism and then went to implement it. Instead we started doing stuff and found that it had ideological baggage. Capitalism is the only option because it's the only fleshed out option because we suck at (rigousrously) imagining alternative economic possibilities.
I have found the theorethical foundations to be pretty weak (as far as theorethical sense of elegancy goes) but here the proof is in the pudding. The theorethical constucts links to real world behaviours are a lot more stronger than the intern...
I strongly suspect that the effectiveness of capitalism as a system of economic organization is proportional to how rational agents participating in it are. I expect that capitalism only optimizes against the general welfare when people in a capitalist society make decisions that go against their own long-term values. The more rational a capitalist society is, the more it begins to resemble an economist's paradise.
I've not read the Rifkin book, so it may have a response to the criticism I'm about to make of your rendition of the key idea.
"The margin" is a concept that is set in a temporal context. That is, the margin is about a decision being made. Historically, economists think primarily of the short term margin: changed to production that can occur without changes in capital (and so, prototypically only using variations in inputs such as labor, energy, and raw materials). This is where marginal cost can fall to zero.
But economists also recognize two furt...
It would be helpful to define terms first. Capitalism is the system of private ownership of scarce objects. People are scarce, land is scarce, resources are scarce. Even if energy becomes plentiful, the means of production of that energy will remain scarce (solar panels and other capital goods). Even if you can 3D print any object, the resources used as inputs are still scarce.
In short, scarcity will not go away, although it will continue to get significantly better, as more valuable and useful things can be produced with less (less labor, less energy, less resources, etc). Therefore private ownership and voluntary association, aka capitalism, will remain.
everything that requires going that extra mile. There's no motivator quite like profit.
Yes, this is the question I would want to have answered first, when speaking about a hypothetical non-capitalist economy. Imagine that there is a situation where...
...what would motivate you to do it for them anyway?
One option is to bite the bullet and say "well, in my utopian society such things would simply never be done". It is an option; and maybe living in such society could still be better on average than what we have now.
Yes, a few people would sometimes die because all surgeons would be playing League of Legends online. But everyone accustomed to living in that society would understand that you cannot blame those surgeons, because they made their free decision they were entitled to; and if you have a different opinion about what surgeons should do, instead of complaining, you should have become a surgeon yourself and do what you believe is right. Maybe the number of people who would die this way would be still smaller than the number of people who today die for other capitalism-caused reasons.
But in our society we have this intuition that if you require other people to go an extra mile for your benefit, you should in return do something else for their benefit. Money, token money, barter, or just something nebulous like status. ("I will remove your appendix if you upvote all my LessWrong comments.")
Other solution is coercion. You have a Taskmaster General, people tell him what they need done, and he assigns those tasks to people who have the necessary skills. If you don't do the assigned task, you get shot. No money necessary, and people are still motivated.
This comes with a lot of problems, for example sometimes you are assigned a task that is truly above your skills, but no one believes you (too many people already tried to excuse themselves by claiming something was too difficult for them, but when a gun was put to their heads, they did it successfully), so you fail, and then you get shot. Also, the Taskmaster General will most likely abuse their powers horribly.
Yet another choice -- beyond trade, coercion, and not having things done -- could be perfect brainwashing. A society where people would be psychologically unable to refuse a request for help. Some people already tried this, but they overestimated their brainwashing skills. But for the sake of experiment, let's suppose that the brainwashing is done successfully. We still have a problem of what happens when there are more requests than people can fulfill. You have to make priorities. How specifically? What if no one will give priority to your pressing needs, because they will always prioritize something else, including completely stupid stuff? Maybe the brainwashing should also include making people unable to requests things they don't seriously need. Or maybe, before you make your request officially, a jury of your peers will evaluate whether your request is reasonable. -- But I feel this direction assumes that the brainwashing itself will act like an intelligent and benevolent entity. Otherwise you could get a society where e.g. most people become religious, and most of the tasks done will be religious rituals. People will request them because they will honestly feel that making God happy is the most important thing, and their brainwashed neighbors will be unable to refuse.
Good points. I don't know, I genuinely don't know yet; this problem is by far the biggest obstacle in the face of a non-capitalist economy (all the rest require more easily conceivable technological and institutional infrastructure). Still racking my brains...
(A more detailed, but still incomplete presentation of this little snippet of an idea was actually the theme for a mega-post I got planned, but it looks like every time I open my mouth about a potentially controversial topic my karma barely manages to break even and I get trolled to hell and back, so ...
Note: I'm terrible at making up titles, and I think that the one I gave may give the wrong impression. If anyone has a suggestion on what I should change it to, it would be much appreciated.
As I've been reading articles on less wrong, it seems to me that there are hints of an underlying belief which states that not only is capitalism a good economic paradigm, it shall remain so. Now, I don't mean to say anything like 'Capitalism is Evil!' I think that capitalism can, and has, done a lot of good for humanity.
However, I don't think that capitalism will be the best economic paradigm going into the future. I used to view capitalism as an inherent part of the society we currently live in, with no real economic competition.
I recently changed my views as a result of a book someone recommended to me 'The zero marginal cost society' by Jeremy Rifkin. In it, the author states that we are in the midst of a third industrial revolution as a result of a new energy/production and communications matrix i.e. renewable energies, 3-D printing and the internet.
The author claims that these three things will eventually bring their respective sectors marginal costs to zero. This is significant because of a 'contradiction at the heart of capitalism' (I'm not sure how to phrase this, so excuse me if I butcher it): competition is at the heart of capitalism, with companies constantly undercutting each other as a result of new technologies. These technological improvement allow a company to produce goods/services at a more attractive price whilst retaining a reasonable profit margin. As a result, we get better and better at producing things, and it lets us produce goods at ever decreasing costs. But what happens when the costs of producing something hit rock bottom? That is, they can go no lower.
3D printing presents a situation like this for a huge amount of industries, as all you really need to do is get some designs, plug in some feedstock and have a power source ready. The internet allows people to share their designs for almost zero cost, and renewable energies are on the rise, presenting the avenue of virtually free power. All that's left is the feedstock, and the cost of this is due to the difficulty of producing it. Once we have better robotics, you won't need anyone to mine/cultivate anything, and the whole thing becomes basically free.
And when you can get your goods, energy and communications for basically free, doesn't that undermine the whole capitalist system? Of course, the arguments presented in the book are much more comprehensive, and it details an alternative economic paradigm called the Commons. I'm just paraphrasing here.
Since my knowledge of economics is woefully inadequate, I was wondering if I've made some ridiculous blunder which everyone knows about on this site. Is there some fundamental reason why Jeremy Rifkin's is a crackpot and I'm a fool for listening to him? Or is it more subtle than that? I ask because I felt the arguments in the book pretty compelling, and I want some opinions from people who are much better suited to critiquing this sort of thing than I.
Here is a link to the download page for the essay titled 'The comedy of the Commons' which provides some of the arguments which convinced me:
http://digitalcommons.law.yale.edu/fss_papers/1828/
A lecture about the Commons itself:
http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2009/ostrom_lecture.pdf
And a paper (?) about governing the commons:
http://www.kuhlen.name/MATERIALIEN/eDok/governing_the_commons1.pdf
And here is a link to the author's page, along with some links to articles about the book:
http://www.thezeromarginalcostsociety.com/pages/Milestones.cfm
http://www.thezeromarginalcostsociety.com/pages/Press--Articles.cfm
An article displaying some of the sheer potential of 3D printers, and how it has the potential to change society in a major way:
http://singularityhub.com/2012/08/22/3d-printers-may-someday-construct-homes-in-less-than-a-day/
Edit: Drat! I forgot about the stupid questions thread. Should I delete this and repost it there? I mean, I hope to discuss this topic with others, so it seems suitable for the DISCUSSION board, but it may also be very stupid. Advice would be appreciated.