T Nation

On Economics


I had an interesting discussion a while back with sloth in the "Pope is a Marxist" thread. Sloth correctly identified some of the main problems with free market capitalism. I agreed with all of his criticism. I think the only point of difference we had was what to do about it. Personally, I don't believe that anything can be done to realistically deal with the inherent flaws of free market capitalism. I'm highly sceptical of utopian "fixes" for social, economic and political problems. So I champion the free market as the lesser of evils. But at the same time I remain highly sceptical of free market capitalism as the be all and end all.

I hardly know where to start with the problems of capitalism. It's such a huge topic and really goes to the very nature of man and society. I'll try to get into it more if a discussion develops here. For starters, I'll give a bit of background.

The Roman Republic remained throughout its existence a society still rooted in feudalism. The Senatorial class was largely an hereditary landed aristocracy. In the early years the Tribunes were tenant farmers and small scale land owners. Later they flocked to the city and the aristocracy began to turn the small tenant farms into huge agricultural holdings. A capitalist class(knights) grew from the trade of the Empire. Radical "left-wing" politics took two forms:

  1. What we would "socialism" - mostly grain rations and handouts from the treasury.

  2. What we would call "distributism" - agrarian "reform" bills that redistributed land to the poor.

Another "class" in a sense were the demobilised legions who became the major power in Rome and led to the rise of unscrupulous demagogues and pretty much brought about the end of Republicanism.

A similar process occurred in Europe with the decline of feudalism and the coming of the industrial revolution. One country that fared better than any other was England. The reason was the close relationship between the landed gentry/aristocracy and their tenants. This largely harmonious relationship survived for centuries and was expressed in the ideology of "agrarianism" - a concept that had a strong influence on Thomas Jefferson in the New World. However, this agreeable relationship between the classes declined and died with the industrial revolution. It was replaced by the hard, cold capitalism of classical liberalism.

The new order saw "progress" as an end in and of itself - progress being defined as productive capacity, industrialisation and science. This, as much as "social liberalism" has led to a cold, sterile culture and the transformation of the civil society. While socialism aimed to collectivise resources in the state, free market capitalism has led to centralised ownership of resources - corporatism - guided by the state. Some have even argued that this process of centralisation is akin to socialism in many respects. Many utopian "fixes" have been proposed - geoism, distributism, syndicalism - a return to the "guild" systems of medieval Europe in various forms etc. some of these ideas are appealing in nature yet they all remain impractical utopian models to my mind. But I'd be interested in discussing them on theoretical grounds. Any thoughts?


Capitalism is simply the control of capital, that is, control of the means to production. Capitalism exists everywhere. Even under Stalin, the Communists were the capitalists as they controlled the means to production. The market simply wasn't free in that case.

The key is "free market" capitalism. The trouble is nobody alive today has ever seen free market capitalism. Perhaps nobody ever. Even in the United States, where the markets are supposedly "free" the markets are actually controlled by the government via extensive regulations, taxation and treaties, as well as incentives for special interests. Since free market capitalism doesn't exist, there is no basis to criticize it. Criticism is just nonsensical for a non-existent entity. What you're really criticizing is sometimes called "crony capitalism" for lack of a better term. Feel free to criticize THAT all you want, as long as you understand it's not a free market.


Kind of like saying Communism has never been tried therefore we can't criticise it. I disagree. The flaws of unrestrained capitalism have been well understood for centuries.


Pure "free market capitalism", insofar as it means a total absence of "government intervention" has not ever existed and may not even be possible

Enforcing contracts is technically "government intervention", depending on how one defines his terms. You tend to not form contracts without a belief that they will be upheld/enforced

This term "unrestrained capitalism" is not as clear to me as it probably is to you. It seems to me that people who like the concepts related to "free market capitalism" have learned to like it by studying price theory, particularly Austrian economics. That's how it was with me anyways

I would like more details on the flaws of "unrestrained capitalism". All I found was this from the OP, which didn't sound right

[i]free market capitalism... guided by the state [/i]

This doesn't really make sense, free market capitalism is supposed to be guided by the supply of resources/goods/services, and the demand for them. Absolutely NOT guided by a central authority

What you described is sometimes called "socialism for the rich", or "crony capitalism". It is when gov't picks the winners (and maybe losers) in business, as opposed to the forces of "demand", "buyers", "the market"


^^I'll respond to your post shortly sb.


It doesn't need to in order for us to examine the flaws of a relatively free market system.

The formation of monopolies. The increasing centralisation of the means of production and resources. But what I was specifically talking about was less to do with the technicalities of macroeconomics and more to do with the nature of man and the state. Most free market capitalists believe that the state has essentially two functions: safeguarding the natural rights of the citizen and facilitating free trade and capitalism. As a traditionalist, I believe that the state must also foster the civil society - I don't believe that wealth creation and "progress" in terms of industrial output and scientific innovation is an end in and of itself. Essentially I'm arguing that a materialistic society is spiritually void. I'm suggesting that other economic models may be better at fostering the civil society.

I'm talking about a relatively free market system. You've acknowledged yourself that free trade needs to be facilitated by the state enforcing contracts. The state also needs to "manage" the economy in various ways - regulations of some form or another. This is the type of "guidance" I'm talking about and it takes many different forms - central banking, anti-monopoly laws, tariffs etc. obviously, in most cases the more intervention there is the less the market is "free" but no market can exist at all without some guidance and regulation which you've acknowledged yourself.

No, I wasn't specifically talking about that but crony capitalism is something that is hard to avoid due to human nature so it is another fair criticism of capitalism given that it can't be entirely avoided and is therefore a natural consequence of capitalism.


Depending on scale your statement is either 100% true or 100% false.

It certainly does, has and will continue for as long as mankind communicates, just on a smaller scale, in niche areas, or for short periods of time.

On the scale of 300m people involved in an economy, you are 100% correct, but if you start breaking it down to smaller and smaller increments it happens.


Capitalism is the best form of economy and socialism the best form of government . I think most here confuse economy and government


Socialism is a political system that seeks to do away with capitalism by nationalising the means of production. Why do you find it so difficult to understand basic concepts such as socialism? Why do you pretend you know what socialism is and advocate it when you clearly don't know what it is? Is English your first language? Are you dyslexic? Learning difficulties?


Worst troll attempt to date.


Oh bullshit socialism in it's ideal form is to take projects that otherwise would be too expensive and pool money to pay for them . That's it , none of you evil socialism bullshit


it is the people that want capitalism to be a form of government that wants you to believe that Democracy , Society and Community are all evil .


How can people "pool money" when money doesn't exist under a socialist system? How can they "pay for things" when there is no market? Nothing is "sold" - it is "distributed" by the government. Karl Marx and other socialists planned to replace currency with "labour vouchers" - do you understand? Under an "ideal" socialist system there is no "private enterprise" - there is not "profit" - there is no "investment" - there is no "interest." Goods and services are produced exclusively by the state and distributed to the people doing away with "capitalism" entirely. Do you understand?



lmao... It's like, not a single book has ever been read on the subject, nor any sort of educational material what-so-ever.

It's scary because you're stupid ass probably votes.


Pittbull I like you, but this is wrong and I should know I am a socialist.

Socialism is an ambrella term for all the political ideologies than in some respect wants to replace the private ownership over the means of Production With a collective ownership over the means of Production. This can mean that the state owns the means of Production, or the commune, or the workers( syndicalism ), or a mix of those 3 alternatives. There can be Money and some form of a market or no Money and no market as Sexmachine alluded too. What socialism is not, is governmental programs like social-security, Public School etc. Yes most socialists are in favor of programs like that, but so are many conservatives and liberals.

I think you mix up socialism With what we in the non-English western world Calls social-liberalism. Social-liberalism is all about creating a humane capitalism, where you have a safety-net, Public programs like education, universal Health care and so on.


It should also be noted the workers owning the capital isn't exclusive to non-capitalist systems. In even free market capitalism you certainly could have employee ownership of your entity, and it happens.


He doesn't care. He lives in a constant state of confusion and when anyone tries to explain something to him he calls them a "circle jerker."


florelius , I like you to but I am talking Ideals , Your Government may be Socialist but I am sure it is as much Socialist as America is a Democracy or I know the CJS will say it is a Republic.


You are right , I don't give a shit :slightly_smiling: But you are also wrong I am not confused . No I call the group of people incapable of disagreeing the CJS


capitalism is working in China (albeit not refined as of yet) it is a form of economy period . IT IS A HUGE MISTAKE TO TRY AND MAKE IT A Government