SHARING

Well put Jeffrey J.!

As long as the media rules, voters will keep electing representatives of the elite and the rich will not have to share!

I hope that Rafe is wrong in predicting that a new capitalism will develop, because it is bound to self-destroy again!

No not new anything, just a return to a mixed economy

The problem in the former Soviet Union wasn't just a problem of regulation, it was utter disconnection. Expecting a bunch of economists in Moscow to understand and plan the material needs of the entire nation, from Vladivostok to the Crimea, is ludicrous.

Concentrating power in the hands of a few bureaucrats is just as bad as concentrating wealth in the hands of a few super rich corporatists. Moreover, both groups end up inventing reasons to justify their own existence.

In the case of bureaucrats, instead of having just enough regulation for safety and other basics of citizen protection, they over-regulate, and don't regularly review the necessity of old regulation.

In the case of the super rich, they propagandize the notion that they are the best and the brightest, and they restructure society to eliminate competition by making access to the best services, like education, healthcare, etc. so expensive that only they can afford them.

The best solution for effective and fair societies, as it has always been, is to promote and support self-organizing groups that are relatively flat hierarchically. Those groups should only be big enough to handle the complexity of whatever particular project needs to be implemented, and no bigger. That structure tends to keep projects smaller, and drastically more efficient.

Regulation under those circumstances should center on providing 1) startup aid, 2) a very light framework of best practices that are adapted to the project's context, 3) rules preventing the concentration of too much wealth into too few hands when projects prove especially profitable, 4) a set of safety and citizen protection rules and standards that are continually reviewed and revised to both improve the efficacy of the protections, AND (this is just as important) continually made easier for the project (company) to fulfill by reducing bureaucratic load.

W. Edwards Deming came up with a method that fulfills most of these notions more than half a century ago. And versions of it are being implemented in many places, both in government and private enterprise.

But Deming's work has't spread as much as it should have, because the super rich in the US (and around the world), legitimately fearing a loss of their power and wealth, subverted their government, and massively propagandized a form of economics that would serve their ends. And the guy who led the economic charge was Milton Friedman. Friedman will rightly go down in history as one of humanity's greatest quislings.

People should really try reading a little Deming, and a little John Kenneth Galbraith.

Politicians still bought and paid for

In an effort to halt the collapse, we've got this trend of politicians rationalizing bailing out big business mortgage holders (funny they are also big campaign donators and fellow golf club members)

For some reason, it was decided in the current economic crisis to bail out banks and stockbrokers. Amusingly when we started talking bailout there was some talk about helping out the great unwashed with problem mortgages. After all our Neocon friends claim ago that ARM folks are the cause of the crisis.

So I took a quick look at it

Total US mortgages $12000 billion, total late a payment of so 9%, total in foreclosure 3%, average mortgage rate 6%

To my surprise, it would cost only $22 billion annual (12000x.03x.06) to keep up the payments on foreclosures and 66 billion on those problem mortgages a month or two behind. This is a lot less than the current plan of handing out $750 billion to banks to cover executive bonuses. We could tell the bankers "You're covered dude. We'll make sure your mortgagee's make every single payment". When they get on their feet we'll recover our losses from them directly. Call it an expansion of the student loan program.

Because this seems so simple and is never talked out I think rather than mortgages, the bailout money is being used to cover the banks massive losses in oil speculation.

For another explanation look at

http://www.naomiklein.org/articles/2008/10/bailout-bush-s-final-pillage

Absolutes

There can be no success when one attaches one's self to any dogmatic wagon, be it pure capitalism or pure socialism. What is needed is a pragmatic mix and and understanding that our leaders are only as good as we hold them into account. Added to the mix is that one person's idea or opinion may be just as valid as another's and that government cannot solve all the problems of the world. Some deviance will always exist.

What we are seeing now is the culmination of the largest theft in history, caused by what I term Regano-Bushism. It was nonsense in 1980 and it is nonsense now. A society is not improved by enriching the already rich at the expense of the less well off. The so called "bailout" of Wall Street was simply one last hurrah of greed and plunder. As the above poster correctly stated, to assist home owners in arrears would cost fractions of what the "bailout" has.

It all goes back to ideology. The Regano-Bushites allied themselves with religious fanatics and created this mess. If there ever was a reason for the separation of church and state, it is been well illustrated in the last eight years.

I, however, refuse to wallow in a pit of pessimism and gloom. I watched the Obama interview on CBS last night and the man makes sense. Some sanity has returned to the USA. We can hope that in the next few years some common sense returns to the USA and the countries that follow it's lead.

takes me back

I remember thinking in high school (several decades ago) that one bloc in the cold war had an economic hierarchy and supposed political equality, and the other block had supposed economic equality and a political hierarchy. Why, I wondered, couldn't we have equality of opportunity in both the political and economic spheres? Maybe we are evolving in that direction, but it's sure taking some time...

A thin ism coin.

When you go far enough to the left you arrive at the right.
Fascism and Communism, Capitalism and Socialism, the thickness of the metal in the coin is inversely proportional to the level of fanaticism. At either extreme the people suffer to enrich the few. Here's hoping we get back to a few fat coins in the average person's purse.

That dismal science

is well-named, isn't it? Trying to determine the difference between Communism and Capitalism is fruitless when comparing how they affect the people at the bottom of the pyramid.

True enough, there are discernible differences in the economics involved, like trade unions which are despised by both systems but which survive more easily within Capitalism because they can more easily appeal to the basic tenet of the program, which is making money for their bosses.

The full story can be found in the major opus of Professor I. P. Standing, "The Golden Stream," which illustrates how well the trickle down theory works to the advantage of the trickler rather than the recipient.

Rafe Mair please note

It gets tiresome to have to have to keep repeating the following on these threads, though it may be instructive to demonstrate the longevity of an illogical meme once it is entrenched in the minds of people.

CAPITALISM IS NOT A POLITICAL SYSTEM. IT IS MERELY A VERY EFFICIENT MEANS OF ORGANISING THE USE OF WEALTH THROUGH VARIOUS MONETARY INSTRUMENTS. As such, although the rules under which it operates may change, it is under NO threat of disappearing. To date, there is NO system waiting in the wings to replace it.

Capitalism is the monetary system used by ALL political systems from the extreme Left ie Communism, to the extreme Right such as Fascism, Dictatorships, and Kingships.

Communism is merely State Capitalism. Fascism and the others profess only Private Capitalism. Despite this, ALL political systems employ various mixes of each, which is the goal of Socialism, the middle ground in regulating the use of Capital within a state.

Another characteristic common to both the extreme Left and the extreme Right is their distrust and dislike of Democracy, and while both profess their concern for the peepul, both are elitist and deliberately subvert Democratic process. Socialism is the expression of Democracy in action.

The perversion of Democracy and the myth of "Free Enterprise" is particularly apparent in the US, where the population has been convinced that unregulated Capitalism and political Democracy are one and the same thing, while very obviously, as we see today, they are not.

Even so, those who excoriate Capitalism alone for the ills we see today are beating upon a dead horse. Who today would - or could - give up mortgages, pensions, investments in business, or even credit cards? It's like moaning about the weather, everybody enjoys doing it, even while knowing that doing so is foolish.

My point here - again - is that we should openly identify the Fascists as such. We should identify them as the elitist thieves they are, while correctly identifying Socialism as the only method to keep them in check.

Beating up on Capitalism - however soul-satisfying it feels - is just as futile as stupidly pissing into the wind, for it ain't going to go away.

There are a lot of

There are a lot of similarities on the failure of both monetary systems 1)lots of graft and corruption. When Breznev was the top dog in the USSR his son and friends were in it up their armpits 2)40 to 50% of the annual budgets of both systems were to the military or related departments,and most of that money was unaccountable. It is really surprising that the Americans didn't learn from the Russians on their failures and that only happened less than 20 years ago. Who says that history doesn't repeat itself.

What's really going on...

http://www.democracynow.org/2008/11/17/naomi_klein_on_the_bailout_profiteers

We get distracted by the details, or the players, see what Seth had to say, too....

socialism

Now, after describing the fall of communism and then capitalism, how the hell did you get to:
"Capitalism as we knew it is dead. Socialism is also tits up."
Surely you are brighter than Sarah Palin (?) Communism and socialism are not the same thing...far from it!

oh please...

ME2, CAPITALISM IS A POLITICAL SYSTEM, BECAUSE ANY MEANS OF ORGANIZING THE USE AND DISTRIBUTION OF WEALTH THROUGH MONETARY INSTRUMENTS IS INHERENTLY POLITICAL.

Capitalism is just one flavor of methodology. You seem to be mistakenly equating capitalism with money. But even money, the forms it takes, how accessible it is, has political elements.

The only place capitalism may appear not to have political elements is in the abstracted notions of textbooks, because language allows the abstraction to appear to be separated from the meat and bone of the ever present. But saying doesn't make it so.

Any distribution of energy, which is essentially what wealth is and what money represents, is an utterly political act, because it determines who has access to resources. Throwing out nuttery that communism is simply state capitalism is oversimplification to an absurd degree.

Capitalism, like any organizational methodology, works best when it is adapted to suit the needs of human beings in their present context, and it must be constantly refactored to best suit our ever changing circumstances.

For example, capitalism is not something that should work the same for developed economies as for the underdeveloped ones.

One of the biggest problems with the bright shiny ideas appended by "-ism" is that their acolytes don't like seeing them dirtied by human hands. They prefer them perfect and pristine, where humans are bent and twisted to fit the model. It may seem to work for a little while, but like anything that tries to defy reality it comes crashing down sooner rather than later.

great comments all (so far anyhow :-)

It's refreshing to see such a set of intelligent commentary without flaming.

The article is pretty right-on too.

semantics

Regardless of definitions one way or the other; regardless of whether one views capitalism as a political or economic system, Rafe's main premise and that of the intelligent commentary above stands -- any political *and* economic system *requires* independent oversight of its administrators to help prevent abuse. Any unbridled system is doomed to eventual failure.

GWest I think I have the translation

...our leaders are only as good as we hold them to account.

Translation:
Now that there is a leftward ideological swing, lets make sure we second guess and misinform about every step made by elected leaders.

Added to the mix is that one person's idea or opinion may be just as valid as another's and that government cannot solve all the problems of the world.

Translation:
Even though the disastrous policies of monetarist economics have been revealed, and the unbridled greed of the west's rich has destroyed the world economy, let's not villainize everyone with money. We're not all... I mean they're not all bad. And let's not do the government thing, they have a pesky habit of fairly redistributing income, especially during times of extreme hardship.

Some deviance will always exist.

Translation:
Bush may be a war criminal, but he's our war criminal... But hell, if you're really that stuck on it go ahead and crucify the guy. Just please excuse me while I *squeak* leave this sinking ship. I'm off to the nearest tropical tax-haven. Oh, and like I aways say: don't worry, be happy. Toodles.

I lived in northern Europe

I lived in northern Europe for 6 years during the seventies and eighties. Denmark and Norway to be precise. I remember quite well how often I would look at how they did things and thought, "now, that's clever". Usually this would revolve around inclusion and the social market. By and large you allow the market to create the wealth and then tax the value added. A social market economy taxes the hell out of luxury items to provide the capital to invest in people and a safety net to preserve human dignity and autonomy. Note the word autonomy and not independence, the latter being part of a dubious north american belief system which promotes the rugged individual as a catch all for personal dignity.

I would prefer a country which is well housed and socially secure, something the Scandinavian countries are famous for. It will cost the taxpayer more but we will save otherwise in rising insurance costs because of the number of homes and autos broken into by the disenfranchised. I speak from experience. We can save health care costs too by properly housing the homeless and thereby maintaining a safe environment free of the mentally ill being preyed upon by unscrupulous drug dealers. I've witnessed the results of our present policy in the emergency ward at St. Pauls ... it costs and we all pay one way or the next.

James Burns

YOU might think that :

"Throwing out nuttery that communism is simply state capitalism is oversimplification to an absurd degree."

But I heard it first on the very first of the Massey Lectures in 1961, and it made such sense I've never forgotten it. The lecturer, Barbara Ward, had far more credentials to make that statement than have you for yours, I think. Here's her bio.

http://en.wikipedia.org/wiki/Barbara_Ward

Nowhere did I write, or imply, that Capitalism does not have "political elements", for like everything else we do, medicine for another, it involves politics in its administration. And like medicine it is a tool, NOT a political philosophy.

You may just as well contend that the barter system was a political philosophy, since it makes no more sense.

Politics becomes necessary because Capital is incapable of self-regulation, as we see today. The "flavour" Capitalism takes on depends entirely upon the Political system in which it is found. How The Market works depends upon the rules it must abide by, and these rules vary according to Politics.

There are very good reasons why we fear having a State run by a particular group of self-interested people such as Religionists, the Military, or Merchants. It was Plato, I think, who first warned against this, and some 2000 years later it was one of founding principles of Democracy and reasons for the vote.

Sorry, James, but a state run only by Capitalists for their own benefit becomes cancerous, and it is long past time to clip their wings.

Nicely put James....

Succinctly and well phrased.

Part of the difficulty, I believe, we often have in defining and understanding Capitalism stems from the fact that we attribute to 'capitalism' many qualities which should be seen as little more than legal or definitional. It is the reliability of this legal framework, more than anything inherent to economic methodology (whether capitalistic or collective), that makes any system successful.

That is, what is necessary for any successful commercial or governmental exercise is that it is structured within a legal system which makes it possible for widely separated people to 'trust' each other in their commercial transactions.

In fact, part of the reason for the current economic melt-down is because that part of the commercial relationship has largely broken down. The currency and reliability of commercial relations is no longer characterized by honour, trust and agreed 'value'. Without that, the clockwork no longer keeps time....

Please try not to misread

I said money has political elements ME2. Money and capitalism aren't the same thing. Capitalism is a political system, because the manner in which a society distributes wealth is a political act.

To suggest communism is state capitalism again gets back to textbook notions that don't reflect actual practice. Now the results for the masses of totalitarian versions of capitalism and communism certainly start to look like each other, but their political and economic implementations are very different.

But hey if Ward is your thing feel free to place your faith in her.

Plato wasn't a friend of democracy. He advocated a society run by elites trained from birth for their respective roles. Think Sparta not Athens (the latter only a democracy for adult males anyway).

Your understanding of a number of things seems a little confused.

Any state run by a small group purely for their own benefit is going to have problems no matter what political system they profess to use. What seems to have worked best in the past is a mixed economy, in other words, strongly regulated capitalism, supported by public works, particularly publicly owned infrastructure and services.

Pure greed

In both ideological economic scenarios, while under the current mindset the same thing holds true. In my mind that is an accelerated depletion of resources and inevitably the destruction of the planets ability to sustain us. Perhaps that is the real issue.

Btw, Guiness Book should list the bailout as the largesse welfare check ever written...oink!

Rafe Mair

equates the two most popular economic theories, Communism and Capitalism, and finds both systems woefully inadequate in confronting the world's problems balancing the "rights" and "obligations" of individuals - that is, what you owe me and what I owe you. Check out Margaret Atwood's take on the subject of debt in the Massey Lectures.

We would do well to remember that the basic underpinnings of both those theories is their idea that unlimited growth is a good thing. We should also remember that "unlimited growth" is one of the primary signs of a cancerous tumour.

In other words, "enough is enough."

debt or duty

I agree with Mr. Mair in his assessment of the two mainstream economic collapses and their similarities. I also feel that the basic unaccountability of Commissars is mirrored by the basic unaccountability of CEOs and CFOs of unchartered corporations. Neither plays with his own money, so neither stands to lose even one dollar from incompetence.

Worse, western economic theory, (well, so-called, thank you Ed), allows these officers to set all parameters without exception, since deregulation. The spectacle of bankrupt companies paying bonuses to officers is no accidental anomaly. Many companies are in fact looted, gutted in ways that could only happen where there is no fear of consequences. The bonuses are merely sopping up the gravy after the meal is done.

Consequences, like losing one's shirt or going to jail, make a huge difference in the amount of damage one twit can do.

An example: Some years ago an American Midwestern plating company hired a lot of middle European laborers. They spoke no English, and The American management, being American, spoke nothing else.

Somebody died owing to the fact that they didn't know that metal is sometimes plated in a cyanide bath.

A coroner called it murder, and two officers of the company were charged and convicted.

The following year, it was reported that nationwide sales of safety equipment tripled.

Why are we seeing no prosecutions in this debacle. We saw none in the thrift mess either, and here we bloody well are again, aren't we?

James Burns

Well, despite my inability - as you so cleverly put it - to grasp reality because of my "confusion", I do and did try to answer your objections with reasoning and examples.

Your concept of discussion, however, consists only of winning; of not debating points but rather distorting what has been said, and dragging out straw men to "prove" your own.

I did NOT say or imply that Plato was a Democrat. I did NOT say that Capitalists weren't involved in Politics. I DID say that Capitalism was a tool, like Medicine. Since Doctors, through their medical associations such as the AMA and CMA are heavily involved in Politics, does that make Medicine a political philosophy?

If Capitalism is a political philosophy, why then isn't there a Capitalist Party? And you have yet to answer what would be the platform of such a Party, nor have you answered what you would replace Capitalism - or money - with?

My yet to be disproven point remains that Politics enters the discussion ONLY when we consider what POLITICAL philosophy we will employ to regulate Capitalism, since regulate we must.

Since you yourself acknowledge that not all Capitalists are anti-Democratic, we must be clear that we are ANTI-FASCIST, not anti-Capitalist / ism.

Until you make that CLEAR distinction, you will continue to allow the Fascists to claim that Capitalism and Democracy are exactly the same thing.

They get away with it because it is clear to most people, even if they don't fully understand why, that it is through the use of Capital - aka money as opposed to barter - economic freedom and the standard of living for the average citizen is higher than ever before.

It is this brain-dead anti-Capitalism stance that keeps the North American voter rightfully wary of Socialist thinking, and in case you hadn't noticed, the neocons have successfully exploited that fact and its inherent classism for decades.

Rumours of capitalism's demise are greatly exaggerated.

All capitalism is, is diverting capital to its most efficient purposes.

What happens when it is inefficiently diverted? Well you see a correction that re-allocates capital.

This is exactly what we have seen in the financial crisis. Disproportionate amounts of capital were allocated to risky portfolios. The reason for this was government stimulation through loose fiscal policy and through promoting loans to unscrupulous borrowers.

The situation was confounded when there weren't adequate information mechanisms for capitalists to accurately gauge the inherent risk of their apportionment.

What will be the fallout, well everyone will learn from this. Monetary policy needs to be tigheter, Government should get out of the game of providing market incentives to loan to people who shouldn't get them, and information transparency will undoubtedly be improved.

It's sad that alot of wealth has disappeared from people but in the end the system will be more efficient.

That's the beauty of capitalism as compared to something like communism. It's adaptable, highly responsive, and ultimately efficient.

I also agree that it's an economic order not a political one.

Give me a break Ronald Pagan

" This is exactly what we have seen in the financial crisis. Disproportionate amounts of capital were allocated to risky portfolios. The reason for this was government stimulation through loose fiscal policy and through promoting loans to unscrupulous borrowers. "

Every capitalist was screaming about too much government interference, now when it collapses it is the governments fault?

" ultimately efficient." eh? like automakers perhaps?

They are efficient in scrambling to have the government save their hides so they can pay out bonus to the very people who were at fault.