Social Democracy

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Long before any economic systems were formed, pure capitalism was the natural state of things, but it's highly unstable. Simple accumulation of wealth and power quickly leads to monopolies, and the only way to prevent them is some kind of regulation.

At the other extreme is total regulation in the form of pure communism, but corruption being the only way to improve one's relative wealth and power, people compete to see who can corrupt the regulation system faster.

Therefore a mixed economy is the only viable possibility, but in what form?

Common capitalism as we see it today regulates the upper end of the economy by occasionally breaking up monopolies at the behest of other rich and powerful corporations. It's an improvement, but much of the population remains in wage slavery at the lower end of the economy due to limited access to resources.

Common welfare-state socialism takes it a step further by providing for the poor. The problem is the "welfare trap"., they only top up your income to where you're not poor, not counting any expenses incurred as a result of any part-time work, so you have to make more money than what welfare provides to be worth working at all.

Hmm.

What I think would work is this:
- abolish welfare, minimum wage, income tax, and maybe even the need for work permits
- implement basic income for all citizens (but not illegal aliens)
- print money to pay for it
- collect land taxes to give the money some guaranteed value (and control inflation)
- continue to regulate monopolies, environmental concerns, and other work conditions as normal

This is a close to pure capitalism as I can see being viable. People can accumulate wealth and resources within reason, but hoarding land or money without using them would be foolish because of taxes and devaluation respectively. Individuals can also withhold their labor without starving, but still have plenty of incentives to work (any money you earn is still yours to spend). As a bonus, America would be taxing drug dealers, illegal immigrants, and even China without having to hunt them down.

Why land tax? Land is hard to hide or move. You can hide, but if you don't pay your land taxes long enough, you just don't own it anymore.

Positively false! Pure capitalism assumes the existence of ownership rights and property. In the hunter gathering mode there is no individually owned property as such and the concept of rights had not yet involved.

What probably did exist in these early days was some kind of trade of goods and services and exchange of information. Humans are genetically wired to be blabber mouths and early man, as does modern man loves to sit around and swap stories. It is our nature.

Humans as they were 100,000 years ago (or perhaps even as they were 250,000 years ago) were individually just as smart as modern humans on average. The main difference between Us Now and Us Then was they we know more now.. Knowledge and technique are cummulative. Part of our blabber inclination as that the old teach the young and the expert teaches the newbie.

ruveyn

Not only the mere existence of "rights" is important, but also the type of system of rights. The Roman Law with its highly abstract idea regarding property can base very well for a capitalist system, also the later developments of the English Common Law, but when we take the system of feudal law, with his restrains regarding the use of property and its mixed forms of property, in which all level of feudal pyramid had some rights, but no one had something which could be called "property" in a strict sense a capitalist system could just not work.

Historically false, and also betraying an astonishing ignorance of basic economic theory.

When we allow a very wide interpretation of "Capitalism" than we may (!) could (!) call under certain restriction (!) the advanced money-based economy of the Roman Empire as capitalistic, or system in some city states in Germany and Italy with the 15th century, but when we speak of a capitalist system in modern sense than the very early beginnings are to see in the Netherlands and England in the late 1500s with the establishment of stock companies and bourses.

Yes, but all of those are well after the time period referenced. Anyways, my bigger objection would be to the baseless assertion that capitalism is unstable and implies accumulation of wealth and monopoly.

Capitalism is unstable by its very nature: Capitalism has the element of the concurrence, one player on the market needs always to be better than the other one. The consequence is highly dynamic system, which only can survive in its constant transformation. Marx called, very correctly, the capitalist system as revolutionary, producing a constant revolution of society and production. It would be more than strange if this could happen without crises.

The accumulation of wealth is the very motor of this process. Without an immense accumulation of wealth in few hands, the motor, demanding always higher amounts of capital, would stock.

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But the question is: Is this negative? I do not think so. The alternative would be going back to the static societies we know from the past.

Yes, capitalism is a dynamic system. I wouldn't consider unstable in the conventional sense, as this would imply that it tends to be very unreliable when it in reality is not. Also, I don't believe there is any reason for capitalism to lead to monopolies.

What does it means "reliable"?

Only a very small percentage of people work their whole live in one company or in one profession. What does it mean in value? An example: A house in London Notting Hill was worth 20 years ago roughly £60'000. A year ago it was worth £2 Mio., now it is perhaps worth £1.7 Mio. The RBS was seen two years ago as a rock-solid cornerstone of the British economy; today it is ballast, saved by HM Treasury from going bust.

Compare this with the live of a peasant in a feudal system: This peasant paid each year his three chicken to his local lordship, worked some weeks for him (for free) and gave him a certain part of the harvest and other things. Like his father did and his grandfather and as his grand children will do. Live was short and miserable, but predicable.

We paid our constant progress in living standard and society, our freedom and wealth with a lack of certainty. I think the price is well worth to pay, but we shall be aware about it.



From the very beginning capitalism was twined with monopoles: The British/English and the Dutch East India Companies were both monopolist. Railsways, telephone, any new technology developed a time a private monopoles. Recently the names were (25 years ago) IBM, today it is Microsoft.

Such monopoles disappear after a period, but they are part of the system.

The East India companies were government-backed monopolies, hardly a product of capitalism. Railway and telephone companies have also had government support. In IT, monopolies can be undermined very quickly as happened to IBM. Monopolies do not characterize capitalism, as there are far more examples of industries with a large number of competing companies (automobiles, computer manufacturers, any variety of consumer goods) than there are of industries dominated by one company (the only one that springs to mind is software, and even in that field MS only really does the operating system and an office suite). In a capitalist system, monopolies are overwhelmingly the exception rather than the rule.

You can't separate the development of capitalism from government intervention: The whole history of capitalism is a history government and private capital working together and against each other. The real starting kick of capitalism in England, the end of the monasteries and confiscation of feudal property was politics of the Tudor dynasty.

Both went and go hand-in-hand. You need certain political parameters right to have a capitalist "kick start". Governments are often forced to do so, but without governments and political structure you can't have a capitalist system. On the other hand the capitalist system provides governments with before unseen means. Therefore government controlled monopoles are part of the capitalist system.



There are the rule in certain point of development of an industry. If this point is passed, the monopole will also fall. But there are part of the system. You need for risk taking enterprises sometimes a government backup in the form of a monopole for a certain time.

Hmm, after looking it up, i guess i had my terminology wrong.

So I guess capitalism requires law, which implies government. If governments also compete, then market interference seems inevitable.



Capitalism doesn't create accumulation of capital; self-interest does that, capitalism simply allows it. If capital increases one's capacity to generate capital, a snowball effect develops.

http://en.wikipedia.org/wiki/Wealth_condensation
http://en.wikipedia.org/wiki/Cycle_of_poverty

Also, any limited resource + ownership rights and property = oligopoly (and sometimes monopoly)

http://en.wikipedia.org/wiki/Primitive_ ... of_capital
http://en.wikipedia.org/wiki/Oligopoly

As no individual can live without food for very long, land ownership is somewhat problematic. Withholding one's labor is not a viable option when subsistence is on the line. How can we have a truly free market without freedom from starvation?

http://en.wikipedia.org/wiki/Wage_slavery
http://en.wikipedia.org/wiki/Equality_of_outcome