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Why is Communism So Opposed?

 
 
Thomas
 
  3  
Reply Thu 17 Jun, 2010 01:26 pm
@Krumple,
Krumple wrote:
The free market will always correct itself, and the only time there is ever a problem within the free market is when government tries to interfere.

That's religion, not economics.

No economist believes that the free market always corrects itself. Economists disagree on how frequently it fails to do so, but none of them believes that it never does. I recommend that you check out any contemporary economics textbook, from Stiglitz on the left to Mankiw on the right. Refer to chapters with titles like "monopoly", "oligopoly", "externalties", "asymmetric information", or "the business cycle". They'll give you an impression of the numerous scenarios in which the free market doesn't correct itself.
Krumple
 
  1  
Reply Thu 17 Jun, 2010 02:53 pm
@Thomas,
already familiar. monopolies are not problems unless they always buy out their competitors. However; large businesses usually trip over themselves so if they ever really try to take advantage of the consumer there will always be someone willing to offer a product a consumer wants. I think this aspect gets neglected.

Rarely do these economic systems get weighted for what they are outside of certain restrictive measures by governmental interference. For example many people believe that the US has been under a capitalist free market system, but that is actually a farce. There hasn't been a free market in the US for over 80 years. The establishment of the FED to artificially set interest rates has always been the burden on the economy. The crash of the stock market during the 20s was caused on purpose to help fuel the need for a centralized banking. Just one step in handing more power and control over into governmental hands. Ever since then we have continuously moved more and more control over. People go along with it because they have been sold the idea that you have to have government control everything. But there is absolutely no need for government to set interest rates. The only reason it does this is so that it can control and manipulate the money supply. Which helps it to generate tax indirectly without the citizens recognizing it as forms of taxation. If they don't call it a tax then it must not be a tax is how most people see it.
Krumple
 
  1  
Reply Thu 17 Jun, 2010 03:07 pm
@Thomas,
Thomas wrote:
No economist believes that the free market always corrects itself.


I guess you have never heard of Peter Schiff.
Thomas
 
  2  
Reply Thu 17 Jun, 2010 03:28 pm
@Krumple,
Krumple wrote:
already familiar. monopolies are not problems unless they always buy out their competitors. However; large businesses usually trip over themselves so if they ever really try to take advantage of the consumer there will always be someone willing to offer a product a consumer wants. I think this aspect gets neglected.

That's what you say, but it's not what economics says. Usually this wouldn't be a problem---but in this case, you chose to promote your viewpoint on the authority of economic science. Given this choice, you need to be candid on what your authority is actually saying. By misrepresenting the findings of economic science as you just did, you compromise your credibility without doing anyone any good, including yourself.

You're right to a point: economics has demonstrated that free markets usually achieve the most efficient outcomes. That's Arrow's First Welfare Theorem, which I'm sure you heard about in your economics class. But economics has also demonstrated that markets sometimes fail, and that governments can sometimes fix things by taxing, subsidizing, regulating and outright producing goods and services. Take healthcare for example: Kenneth Arrow---the same Arrow after whom the First Welfare Theorem is named---found in a 1962 paper (PDF) that the healthcare sector is ripe with market failuers---the very kind of market failures that government has a fighting chance to fix.

Free markets are tools, not fetishes. Sometimes other tools work better. So why not use whatever tool works best, whether it's a market or not?
0 Replies
 
Thomas
 
  1  
Reply Thu 17 Jun, 2010 03:29 pm
@Krumple,
Krumple wrote:

Thomas wrote:
No economist believes that the free market always corrects itself.


I guess you have never heard of Peter Schiff.

Indeed I haven't. But if you show me a peer-reviewed paper of Schiff's where he demonstrates that the free market will always correct itself, I'll be happy to consider it.
0 Replies
 
Thomas
 
  2  
Reply Thu 17 Jun, 2010 03:34 pm
@Krumple,
PS: Judging by Wikipedia's article on Peter Schiff, he's a businessman and a TV personality. Sorry, but that doesn't make him an economist---any more than being a bird would make him an ornithologist.
Mercer
 
  1  
Reply Thu 17 Jun, 2010 05:04 pm
@Thomas,
Quote:
No---because the legal system does not protect the buyers of drugs against fraud. It does protect the buyers from legal merchandise against fraud. So, once again, you're trying to illustrate the workings of capitalism with a departure from the normal workings of capitalism.

No, I was not talking about only drug transactions only but transactions in general.
Quote:
Typically, yes. And even in cases where it wasn't, their footing is certainly more nearly equal than the alternative in this thread. If the encounter happens in North Korea, between a communist party official and an ordinary citizen, the footing is most certainly less equal.

Or the suicidal workers in China making our computers. Or the migrant workers in the US. Or just the corporation that can drag out a lawsuit for years and years until the less wealthy plaintive runs out of money. One hardly needs to go all the way to North Korea to find an example of less than equal footing. And as China and North Korea prove just because a country claims to follow communist principles doesn't mean they actually follow communist principles. Same goes for capitalism. "Communist" and "capitalist" are words that have become nearly meaningless... that's one reason that "communism" is so opposed...and one of the reasons "capitalism" is so advocated.
Thomas
 
  1  
Reply Thu 17 Jun, 2010 05:23 pm
@Mercer,
Mercer wrote:
And as China and North Korea prove just because a country claims to follow communist principles doesn't mean they actually follow communist principles.

Fair enough. Then let me answer this: which countries in the world do follow communist principles? And in which way are those countries economically and socially successful?
Mercer
 
  1  
Reply Thu 17 Jun, 2010 05:51 pm
@Thomas,
Quote:
Fair enough. Then let me answer this: which countries in the world do follow communist principles? And in which way are those countries economically and socially successful?

Fair enough. Then let me answer this: which countries in the world do follow capitalist principles? And in which way are those countries economically and socially successful?

Typically the libertarian set blame all the problems, in for example the US, on regulation and government intervention. Thus the US must not be "capitalist" by libertarian standards. Okay, then, give some examples of countries that do follow the tenants of "capitalism" that exist today?
Krumple
 
  1  
Reply Thu 17 Jun, 2010 05:57 pm
@Thomas,
Thomas wrote:

PS: Judging by Wikipedia's article on Peter Schiff, he's a businessman and a TV personality. Sorry, but that doesn't make him an economist---any more than being a bird would make him an ornithologist.


He is an economist. He was arguing long before the housing bubble crashed that it was going to happen. He would make tv appearances and warn people when everyone else would be laughing at him during the conversation.

http://www.youtube.com/watch?v=FtODbOaw728

He was the ONLY economist that was warning about the economic collapse that we found ourselves in. He is still warning about up coming problems but no one wants to listen. He is totally the boy who cried wolf and every one of his predictions has come to pass but no one wants to listen.
Thomas
 
  2  
Reply Thu 17 Jun, 2010 06:06 pm
@Mercer,
Mercer wrote:

Quote:
Fair enough. Then let me answer this: which countries in the world do follow communist principles? And in which way are those countries economically and socially successful?

Fair enough. Then let me answer this: which countries in the world do follow capitalist principles? And in which way are those countries economically and socially successful?

1) In other words, you can't answer my question. I expected as much.

2) To answer your question, let me start by defining our terms. According to Webster's dictionary, capitalism is "an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market". By this definition, all of the following countries qualify as capitalist: the USA, Canada, England, Australia, and most of continental Europe. They are economically and socially successful in that per-capita incomes are among the highest in the world, life expectancy is among the highest in the world, and the income of poor people---as measured by per-capita income in the lowest decile of the income distribution---is among the highest in the world.
Thomas
 
  2  
Reply Thu 17 Jun, 2010 06:15 pm
@Krumple,
Krumple wrote:
He was the ONLY economist that was warning about the economic collapse that we found ourselves in.

Not true. In the New York Times, Paul Krugman warned about it in 2005, a year before your Peter-Schiff video---citing economists who predicted it even earlier. (So he wasn't even the first.) Your hagiographic reverence for Peter Schiff has no basis in reality.
0 Replies
 
Mercer
 
  1  
Reply Thu 17 Jun, 2010 06:35 pm
@Thomas,
Well, for example, England Canada and Australia all have socialized medicine so they are socialist as far as that goes. Some of FDR's New Deal has been dismantled but we still have Social Security and Medicare and the Obama administration has expanded socialized medicine in the US. Military, Police, Fire Department, Mail, and other services are still socialized and hopefully will stay that way. So there are some exceptions it seems. Partly socialist and partly capitalist. Then there are of course the recent bank bail outs (remember those?)... which qualify as neither communistic/socialistic nor capitalistic though possibly "fascistic" by some definitions of yet another ambiguous term.

Also, I prefer to distinguish Corporate Capitalism from Classical Capitalism. Will you agree to make that distinction? Do you prefer the former or the latter? Which form of capitalism do you think is most deserving of the title "capitalism" and which is more dominant in the countries you listed?
Thomas
 
  2  
Reply Thu 17 Jun, 2010 06:44 pm
@Mercer,
Mercer wrote:
Well, for example, England Canada and Australia all have socialized medicine so they are socialist as far as that goes.

True---but we were talking about countries, not individual economic sectors. And Webster only requires that the country be "characterized by" private property etc. It doesn't require that all property, all decision-making, and the entire income distribution belongs to the private sector.

Mercer wrote:
Also, I prefer to distinguish Corporate Capitalism from Classical Capitalism. Will you agree to make that distinction?

I don't know, because I never spent too much thought on it. I guess I'll just play along for now and see where it goes. Fair enough?

Mercer wrote:
Do you prefer the former or the latter?

If I had a choice, I'd prefer an economy of indivdual yeowmen interacting through competitive markets to an economy where each sector is dominated by a few small corporations. Two reasons (1) I dislike the way big corporations tend to be organized internally---basically they're feudal fiefdoms, whatever their organigram says. (2) Monopoly power is a much greater problem when industrial sectors are dominated by a few large corporations.

Mercer wrote:
Which form of capitalism do you think is most deserving of the title "capitalism"?

No difference. Private ownership is private ownership, and capitalism is capitalism.
Mercer
 
  0  
Reply Thu 17 Jun, 2010 06:52 pm
@Thomas,
Quote:
True---but we were talking about countries, not individual economic sectors. And Webster only requires that the country be "characterized by" private property etc. It doesn't require that all property, all decision-making, and the entire income distribution belongs to the private sector.

Cherry picking.
Quote:
No difference. Private ownership is private ownership, and capitalism is capitalism.

Well, that's enough. This conversation is no longer worth my time. Nice talking with you.
Thomas
 
  1  
Reply Thu 17 Jun, 2010 07:29 pm
@Mercer,
Likewise.
0 Replies
 
xris
 
  1  
Reply Fri 18 Jun, 2010 12:15 pm
The rhetoric of those who criticise socialism has nothing to do with reality. Again and again I see the American right unable to see the problems of uncontrolled capitalism and the benefits of democratic social measures. I spent weeks debating with Nero on all of these subjects and in reality it was fruitless journey. Examples of the restrictive nature of monopolies, I gave him, but with no acceptance its dangers. I debated for weeks on social health care, proving over and over again its benefits but with his usual obstinacy refused to accept the facts. Dogmatic faith and blinkered political opinions are the same, just different players.
electronicmail
 
  1  
Reply Sat 19 Jun, 2010 06:43 am
@Thomas,
Quote:
No economist believes that the free market always corrects itself.

ALL economists believe that. Marx didn't but then he was no economist any more than you are.
THE ONLY 2 problems with leaving the free market to correct itself are the costs of the correction and the time it takes.

I guess you can't answer my question from the previous page but I'm not surprised you don't have an answer.
electronicmail
 
  0  
Reply Sat 19 Jun, 2010 06:55 am
@xris,
Quote:
Examples of the restrictive nature of monopolies, I gave him, but with no acceptance its dangers. I debated for weeks on social health care, proving over and over again its benefits ..

Another non-economist, right? In economic terms monopoly by the state differs from monopoly by a private business how, exactly? It doesn't.
I'm going to quote Karl Rove who warned us about Obamacare:
Quote:
In his brilliant exposition of why sweeping policy changes often have unintended consequences, the late sociologist Robert K. Merton wrote that leaders get things wrong when their "paramount concern with the foreseen immediate consequences excludes the consideration of further or other consequences" of their proposals. This leads policy makers to assert things that are false, wishing them to be true.
Which brings us to President Obama's many claims about his health-care reform. Take his oft-expressed statement that if you like the coverage you have, you can keep it. That sounds good—but perverse incentives in his new law will cause most Americans to lose their existing insurance.
This was brought home to me when I asked the CEO of a major restaurant chain about health reform's effect on his company, which now spends $25 million a year on employee health insurance. That will jump to at least $90 million a year once the new law is phased in. It will be cheaper, he told me, for the company to dump its coverage and pay a fine—$2,000 for each full-time worker—and make sure that no part-time employee accidentally worked 31 hours and thereby incurred the fine.
....Either way—self-deception or deliberate deceit—health reform is going to turn out far differently than was promised. And because more workers will be dumped into subsidized coverage, taxpayers are likely to pay much more than the $1 trillion-plus price tag claimed by ObamaCare advocates for its first 10 years.......
ObamaCare generates more bad news every month. On top of sluggish job creation, burgeoning deficits, out-of-control spending, and a miserable response to the Gulf oil leak, the Obama presidency may be reaching a tipping point. His competence is being called into question and his credibility undermined. Either one is bad for any president. Both can be politically lethal.

You don't like monopolies, why can't you see that that's what communism is, monopoly of everything by the state. All those "social" policies leading in that direction are bound to fail at great cost to taxpayers.

I'm a Tea Party activist and I want us to roll back this wasteful tide of spending ever more money we don't have on social problems that this "solution" is only making worse.

Let's get our country back!
xris
 
  1  
Reply Sat 19 Jun, 2010 08:09 am
@electronicmail,
O dear,that word again, communism , what is it about Americans that have to use it to decry a social measure? Don't question the intentions or the details just wrap it up in rhetoric and we will all wave our flags and sing patriotic songs our founding fathers would be so pleased to hear. Monopolies of state, so you don't agree with them? So whats the military? whats the police force? They are not restricting your freedom and why should a common health prescribed health service divorce you from choice? Monopolies designed by corporate bodies, its those that are intended to take away choice, not social necessities for every one's benefit.
 

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