America Losing Faith In Capitalism
In 2009 the worst recession since the Great Depression hit the world, and it hit the U.S. particularly hard. We’ve had a long, slow climb off of the bottom but we still have a long way to go before our economy would be considered strong. I think a lot of Americans realize that we will never be as we were before. Perhaps that’s why The Economist found that American support for capitalism has dropped 20% in the last 2 years.
RISING debt and lost output are the common measures of the cost of the financial crisis. But a new global opinion poll shows another, perhaps more serious form of damage: falling public support for capitalism. This is most marked in the country that used to epitomise free enterprise. In 2002, 80% of Americans agreed that the world’s best bet was the free-market system. By 2010 that support had fallen to 59%, only a little above the 54% average for the 25 countries polled. Nominally Communist China is now one of the world’s strongest supporters of capitalism, at 68%, up from 66% in 2002. Brazil scores 68% too. Germany squeaks into top place with 69%.
Perhaps there is some political peril for a party to sell the “free market” as the only arbiter for public policy. The Republican party has told us that the free market demands we all take lower wages, poorer benefits and higher unemployment for competition’s sake. The GOP has also told us that any attempts to regulate attempts to screw us (like selling us houses we can’t afford with mortgages we can’t understand) will hurt the free market, so it mustn’t be done.
Tags: Capitalism, Economist, Economy, Financial Crisis
I guess the GOP’s plan to burn everything down and start civilization fresh is on pace.
Capitalism is fine…. as long as you dont apply it to goods and services that really really matter.
Go one better. Capitalism is fine, as long as there is competition. Once a company becomes too big, (and can set prices above market value) they need to be split up so capitalism can continue to flourish.
Teddy Roosevelt split up monopolies and America went strong for another hundred years, until the Bush Republicans dismantled those protections, and we went right back where we were under Standard Oil.
One should never vote for a Republican unless they’ve studied economic history.
Socialistic Ben, I’m not sure what you mean by that, but as the benefits of American capitalism continue to be horded by the top 1% of society it could be a mere 150 to 200 years before the proles find it not worth keeping.
Capitalistic principles create a conflict of interest in say…. the health care industry. More specifically, health insurance. According to the F’ree Ma’Arket, a company has to be profitable and to be profitable, insurance companies cant do something silly like approve coverage for sick people.
Selling TVs is fine. I have no problem with competition and making money, but it is not more important than a human life. I know that seems kind of obvious, but ya think Paul Ryan cares more about your life than the new car he’s gonna buy?
No, when the good or service is more important the the money made off of it…. like keeping people alive or educated, i would say capitalism has no place. the bottom line will win every time and people will suffer. all in the name of competition.
remember also… the final result of capitalism is.. one person has everything and everyone else has nothing.
“One should never vote for a Republican unless they’ve studied economic history.”
or if they love God, the troops, America, our children, and Kenney Chesney
We do not live in a free market, merely an enfeebled shadow version. State interference in the market is why we are in this mess.
The biggest culprit? The Federal Reserve.
The dollar has lost over 95% percent of its value since 1913. This is why it is nigh impossible for the poor to save and build wealth.
The inflationary monetary policy of the Fed creates the bubbles that lead to situations such as our latest financial crisis.
Printing money out of thin air impoverishes the poor above all, and the Federal Reserve has been doing it for almost a century.
End the Fed.
Learn more:
http://mises.org/daily/3687
oh my god… more of this Ron Paul BS. Ok, let’s end the Fed…. then what?
After you burn down they system and get rid of that evil central currency then what?
Wompom? gonna trade a box of cigs for a new car?
But Republicans cling to the idea of privatizing Medicare. Capitalism rules our health industry.
From this morning’s NYT article on Medicare and entitlements . . .
“President Obama is expected to enter the debate over entitlement spending in a speech on Wednesday and could offer his own views on how to control Medicare costs. But he is expected to go nowhere near as far as Republicans did in the Ryan budget.
Republicans say the willingness of the White House to talk about entitlement changes could reinforce the Republican claim that steps need to be taken to preserve Medicare, limiting the ability of Democrats to attack and making the debate mainly about what the steps should be.”
Watching our President negotiate is like watching a train wreck. The Public Option goes off the table before the negotiations even begin on HCR. Now he’s going to waffle around on privatizing Medicare. It is very likely that Medicare will have to undergo some sort of rationing in the future as the baby boomers hit, but that is not a starting position we should use with these muggers. Any belief that Ryan and his fellow Republicans are coming to the table in good faith is simply silly. Their goal is destruction of Medicare, not fiscally prudent steps to preserve it.
Oh and, Republicans don’t EVER study economic history. They prefer the unicorns and glitter theory of economics. At least, that’s what they say. But always look for the hidden agenda to make sure the top 1% get it ALL. It is, and always has been class warfare with these guys.
“The dollar has lost over 95% percent of its value since 1913. This is why it is nigh impossible for the poor to save and build wealth.”
You are as wrong as it’s possible to be. Inflation has been quite low for the past 25 years, a period in which vast amounts of wealth have been redistributed to the upper classes and poverty has increased. The Fed didn’t have anything to do with it.
The Fed is what we have instead of a central bank. The lack of a central bank set back American prosperity for decades before the Civil War, and allowed for an 18-year recession after the Panic of 1873.
The less you know, the more appealing Ron Paul sounds.
Sound money.
Every dollar that is pumped into the system, that is, created out of thin air, makes the dollars you earn and save less valuable. You’re being robbed by inflation and you don’t even know it.
You’re afraid because you don’t understand. Study, learn, educate yourself. Don’t deride something without even bothering to check out the information. Read through the chapter here for a good overview: http://mises.org/daily/3687
Here’s a great place to learn more about what this is all about:
http://www.mises.org
UNFETTERED Capitalism is the problem.
Just as Democracy needs a system of checks and balances so does the “free” market.
We’ve seen the fulcrum swing in one direction and STAY there.
If this trend continues, there is only insurrection in our future.
To paraphrase and old saw: Even a blind pig NEEDS to find an acorn once in a while.
I understand perfectly well, and the only thing I’m afraid of is morons like you. Once you can recite to me the history of modern econmics with regard to central banks, I’ll start listening. Until then, I suggest you find a libetarian site to proselytize.
“The Fed is what we have instead of a central bank.”
The Fed is a central bank.
I bet you also think inflation is a naturally occuring phenomenon.
Some economic historians have complained about the “great depression” that is supposed to have struck the United States in the panic of 1873 and lasted for an unprecedented six years, until 1879. Much of this stagnation is supposed to have been caused by a monetary contraction leading to the resumption of specie payments in 1879. However, this “depression” saw an extraordinarily large expansion of industry, of railroads, of physical output, of net national product, and real per capita income. As Friedman and Schwartz admit, the decade from 1869 to 1879 saw a 3-percent-per annum increase in money national product, an outstanding real national product growth of 6.8 percent per year in this period, and a phenomenal rise of 4.5 percent per year in real product per capita. Even the alleged “monetary contraction” never took place, the money supply increasing by 2.7 percent per year in this period. From 1873 through 1878, before another spurt of monetary expansion, the total supply of bank money rose from $1.964 billion to $2.221 billion—a rise of 13.1 percent or 2.6 percent per year. In short, a modest but definite rise, and scarcely a contraction.
The myth was brought about by misinterpretation of the fact that prices in general fell sharply during the entire period. Indeed they fell from the end of the Civil War until 1879. Friedman and Schwartz estimated that prices in general fell from 1869 to 1879 by 3.8 percent per annum. In the natural course of events, when government and the banking system do not increase the money supply very rapidly, free-market capitalism will result in an increase of production and economic growth so great as to swamp the increase of money supply. Prices will fall, and the consequences will be not depression or stagnation, but prosperity (since costs are falling, too) economic growth, and the spread of the increased living standard to all the consumers.
Source: http://wiki.mises.org/wiki/Panic_of_1873
Source: Murray N. Rothbard. “A History of Money and Banking in the United States: The Colonial Era to World War II” http://mises.org/books/historyofmoney.pdf
“If this trend continues, there is only insurrection in our future.”
Please don’t misdirect your ire. Capitalism is not the enemy. The Federal Reserve and the welfare-warfare state are our enemy.
“The Fed is a central bank.”
But not owned by the government. Your arguments are nothing beyond the “hard money” arguments voiced by monied interests since the dawn of time — fruitlessly, I might add.
If deflation worked the way you and your sources think it should, Japan would be a paradise right now. Seriously, your credulity is touching, but you’ll find other waters more fruitful for your fishing. Most progressives have no problem with a “welfare state,” since it is, after all, the common welfare that’s at issue.
“If deflation worked the way you and your sources think it should, Japan would be a paradise right now.”
Japan, whose debt is 225% of GDP, and has the same system of central banking and fiat currency is not a model for sound money.
“The Fed is a central bank.
But not owned by the government.”
Correct. It’s a government-sanctioned cartel with control over our currency and banking. Cartels are not compatible with a free market.
Nobody here wants a free market. Seriously, fella, if you’re going to come here to spout Austrian School utopianism, you’re tilling rocky soil. Please spill your seed on someone who cares.
Then again, look at China. In thousands of years, they’ve had several different governments operating on vastly different theories, yet, as the inventor of capitalism (and insurance), no matter what the government is called, China has been by and large a capitalist system. As the oldest and longest living governmental entity, it seems they’ve hit on something.
For those who don’t know or don’t care, the economist FM cited, Murray Rothbard, is a hard-core Austrian School nutjob who thinks even national defense should be left to the free market. That’s about as likely to happen as the notion that the richest country on earth would disband its version of a central bank.
People like Free Market make me believe we need more porn on the internet, to keep his sort from thinking so much.
“Nobody here wants a free market.”
The end result of curtailed economic liberty is curtailed civil liberty.
Capitalism is broken whenever there’s collusion, be it between companies or companies and the government.
And in some circumstances capitalism is just not an efficient model, such as with health care. Whenever there’s an immeadiate need, that’s when price-gouging occurs.
“For those who don’t know or don’t care, the economist FM cited, Murray Rothbard, is a hard-core Austrian School nutjob…”
Whose economic theories correctly predict the inflationary cycle of recession we experience today.
“…who thinks even national defense should be left to the free market.”
I do not advocate that position. Albert Einstein had some controversial views as well, but that doesn’t invalidate his works of genius.
However, in a free world that adheres to the true principles of liberty and non-aggression, national defense would not be necessary. Even socialists can agree with that statement. Unfortunately, that’s not the case right now. Moreover, I believe that that world is the Utopia you were referencing earler.
You talk as if socialism and capitalism are mutually exclusive. That would be surprising to the 100% of the western world, including Japan, China and Russia, that are socialistic countries. Now the degree of socialism is where the differences lie.
I don’t think they’re mutually exclusive, but in a fundamental way one system will always work to the detriment of the other.
Geezer brought up a good point with national defense earlier. Without a common defense, a capitalistic state could easily be defeated by a socialistic state. However, funding that defense is a burden on the private sector, no doubt about it.
I also think that the government should perform numerous essential duties: fund roads, administer justice, play a part in the development of natural resources, just to name a few. What those necessary functions of government are, and where the acceptable level of market interference is, is where we start disagreeing.
I can agree with that last statement. But what overrides everything else, and the only thing thats in our charter, is we’re a representative democracy, period. If citizens vote in the politicians who vote for universal health care or for privatizing all the interstate roads, it doesnt betray the ideals of America.
Still after 230 years it’s still a fight between the republicans and federalists. 🙂
“I don’t think they’re mutually exclusive, but in a fundamental way one system will always work to the detriment of the other.”
i agree with that. For example…. if you are an insurance company betting on people not having to use their health insurance, you have to make a difficult (heh) decision when someone gets sick….. pay for your customer and fellow human to get life saving treatment and provide the service you claim to offer… or find some loophole that allows you let let them die and you save money.
OR you are a toy maker…. you can a) employ americans and follow our safety rules in regard to worker protection and safety standards for your product…. OR make everything in china where there are basically no standards and the fine you pay for selling poison toys is only a fraction of the added profit. Capitalism works to the detriment to society’s well-being. This myth that the people will “vote against” bad companies gets proven wrong every time Wall-Mart or Exxon or BfuckingP posts record profits.
free market theory says that everyone acting in their own selfish self interests will maximize wealth for everyone….. that is the biggest croc of shit on the planet.
“But what overrides everything else, and the only thing thats in our charter, is we’re a representative democracy, period. If citizens vote in the politicians who vote for universal health care or for privatizing all the interstate roads, it doesnt betray the ideals of America.”
The only thing that’s in our charter? Can you explain that statement for me?
Our national charter, the United States Constitution, lays out the function of our federal government, including limits on legislative authority. Our state charter, the Delaware Consitution, acts in the same way.
If elected politicians pass a law that violates the charter between the citizens and the government, they, and the resultant law, are in violation of the social contract.
No one, including elected officials, is above the law. If it was truly the will of the people to change the constitutional limits placed on government, the amendment process would be used.
Krushchev had a favorite anecdote he would tell of a man who fell on hard times and had to move in with his goat.The man hated the smell but,eventually, he got used to it.
I will never get used to the smell of goat.
I will die with the taste of beef in my mouth and the memory of warring for pastures denied.
Socialistic Ben-
Should automotive garages that engage in unscrupulous behavior be used as justification for the nationalization of automotive repair work? Or should they be prosecuted by the justice system?
In order to survive, capitalism and liberty require the enforcement of just law.
There are steps between free market and government control – it’s called regulation. You actually have to have regulations in place for courts to protect your rights to not be ripped off by auto mechanics.
Never try to teach a pig to sing. It frustrates you and annoys the pig.
This person, for whatever reason, feels the need to argue with people who disagree with him. He has no intention of engaging in an actual dialogue, one in which all participating are willing to engage issues with an open mind. He certainly isn’t here to talk about realistic solutions to serious problems. He is here to proselytize for libertarianism.
Jason has the right idea about libertarians.
Unstable Isotope: Exactly- just law. Regulation is okay, as long as it is just.
Quick examples:
Is forcing a business to provide a service to an individual just? No.
Is punishing a business that steals from an individual just? Yes. (e.g. the automotive garage that lies about the scope of needed repairs)
Geezer, I thought we were having a good dialogue. Your version of dialogue must be one where everyone agrees with one another. If that was dialogue, people might as well just talk to themselves- there wouldn’t be any difference.
Capitalism is a great engine for innovation, but it’s terrible at providing a good standard of living for most people. That’s why the European social democracies–particularly in the Scandinavian countries–encourage innovation while offsetting the ravages of unfettered capitalism on the populace’s standard of living. I believe that if the American people could just learn to stop being jerked around by the doomsayers, they would opt for a social democratic system. That’s what I think the results of the poll by The Economist portends.
Skippertee:
The Soviet people used to have a joke they told among themselves. We pretend to work, and they pretend to pay us.
“Capitalism is a great engine for innovation, but it’s terrible at providing a good standard of living for most people.”
I disagree. The high standard of living enjoyed by people around the world, and our country in particular, is thanks to capitalism. Capitalism created the agriculture system we enjoy today, which freed up labor for industry and provides affordable food. Capitalism created the mass industrial production we enjoy today, which provides inexpensive products: clothing, automobiles, tools, etc. Transportation, energy, modern medicine, all fruits of capitalism.
Look back one hundred, two hundred, three hundred years to see the differences that capitalist-fostered trade, innovation, and liberty have made. Bad as things are in some areas, the standard of living around the world is much higher thanks to capitalism.
I’m not saying things are perfect, far from it, but humanity has prospered thanks to capitalism, not in spite of it. And in that spirit, now is not the time to hinder that amazing progress.
Well, Free Market, you are adept at citing economic cultists, but let’s see what you know. Above you write: “However, this “depression” saw an extraordinarily large expansion…of railroads….”
Tell us: who sold the land to the railroads? Were the prices for the land set at market value? If not–if they were set way below market value–did they not amount to a subsidy? Could just anyone buy the land at those prices? Or was the land sales designated so that only the railroads could buy them?
@ Free Market-Yes, the Russians have a wonderful,dry,morbid sense of humor. It seems to have been inculcated over the thousand years of being under the yoke by various types of oppressive types of government.
For the most part, the peoples of America fled those same oppressors.
When they wake up and realize we have a new oppressor confronting us,and nowhere to run,we’ll make our stand.
“Listen to me now.
Believe me later.”
Dana, agreed. Preferential government subsidies are direct distortions of the free market system. Favoring one industry over another is wrong. You will get no argument from me there. The railroad land grab is further proof of the dangers of excessive government intervention in the market.
More of the same: corn ethanol subsidies, oil industry subsidies, renewable energy subsidies, agricultural subsidies, etc.
Free Market, capitalism is great at innovation, the mass production of many things, and the generation of considerable wealth (even Marx conceded that), but largely unfettered capitalism was a pariah that most western democracies realized that had to be controlled. What gave people a decent standard of living within a capitalist economy were things like the advent of trade unions and laws protecting them, minimum wage laws, worker compensation laws, unemployment insurance, laws designating the number of hours an employee can work in a week, laws regulating overtime pay, laws regulating paid sick leave (in countries other than the USA), etc., etc. In short, it was social and legal intrusion into the workings of a capitalist economy, the fettering of it, wealth distribution, that made the difference. That’s why when free marketers like yourself come along and advocate removing these fetters that you come across as such an anachronism.
Preferential government subsidies are direct distortions of the free market system.
So what?
Yes, we do have different ideas of dialogue. I prefer to engage in it with people who know more than I do, not less.
Dana, you bring up good points, some of which I dispute, but I’m out of time. I’ll jump back in here later tonight if you’d like to continue the discussion!
Before I go, here’s my parting shot: Educate yourself about the Federal Reserve! Everyone needs to understand what they’ve done to our money!
“Should automotive garages that engage in unscrupulous behavior be used as justification for the nationalization of automotive repair work? Or should they be prosecuted by the justice system?”
ah if only it were that simple.
also nice try at teh black and white argument….. I think companies should be held to account for their actions, therefor I am all for nationalization of everything.
you also brought up how we should thank free market capitalism for the “high standard of living” around the world. Last time i checked the number of Americans living in poverty has grown steadily since we started deregulating business and letting the “market get freer”
explain that.
“Only thing” was meant when talking about capitalism v socialism. There’s no mention of a economic system in the constitution But the wording, meaning and spirit of the constitution certainly has a socialistic tone to it.
So when the idiots scream socialism, and that it’s so unAmerican, the only thing that’s certain is that those folks have no effing clue of what they’re screaming about.
We are all socialists. To what degree we want to go is up to us.
Ever notice it only seems to be the Free Market guys who take an All or Nothing approach to economic philosophy? If i want to regulate the practices of a company so they get shut down as soon as they dump toxic waste into the river….. i MUST want to nationalize baby sitters and lemonade stands. It’s like they aren’t capable of complex thought…… and are usually proud of it.
@socialistic ben, when was the last time you experienced a truly free market? These capitalist haven’t either,and that’s their problem. America is overcome with monopolies and lobbyists and greedy politicians. Its disgusting: war profiteers, incarceration industry and MFing HMO’s.
Oh, mustn’t forget Delaware’s biggy: debt service, I mean credit banking.
The ones with the money know what they’re doing; they play dumb and say things like you mentioned, sb. It’s the rubes who think they’ll eventually have money, even thought they’re 55, fat and suffering from some fantasy entitlement dream, that actually believe what comes out of the mouths of the dog-eat-dog wealthy, parrot the lies and talking points, and subsequently enabling the ones who have their worst interests at heart.
It’s not surprising in the least that the tea party faction of the GOP was started by a wall street talking head and the Dick Armey.
@ VC – powerball!
Americans support free market capitalism not crony capitalism.
So you are OK with NAFTA?? David
@ Republican David Is that right? So now you’re creating yet another definition of “American”?