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The Mystery of Capital

timothy posted more than 13 years ago | from the richest-man-in-babylon dept.

The Almighty Buck 234

Reader Mike N. contributed this review of The Mystery Of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. Hernando de Soto, for those unfamiliar, is an interesting character in his own right.

We read about the new economy, cyber-squatting, e-cash, intellectual property, and the Wild West on the internet. How can we intelligently consider these concepts if we are unclear about what the old economy, or cash, or physical property (let alone the real Wild West) is?

Hernado de Soto addresses the latter questions while making the case for his central thesis: that Western property law and administrative infrastructure is the reason for the ascendency of the Western economy.

The book is framed as an investigation of the 'Five Mysteries of Capital' during which the author enthusiastically demonstrates the shortcomings of common knowledge on the subjects of poverty, money, law, and history.

De Soto's mysteries are, in short:

  1. The Mystery of Missing Information. How much poverty, and conversely, how much property is there in poor countries, and how do we measure it? Huge numbers of people live and work off the books: they have no clear title to their land and possessions, they pay no taxes, they have no credit. We're not talking about subsistence farming here, but about buses and taxis, repair shops, and light industry. This 'Shadow Economy' is explored, and the 'Dark Capital' bound to undocumented resources is examined.

  2. The Mystery of Capital. What is Capital, where does it come from? De Soto views capital as not just a proxy for physical assets, but as a side effect of of property laws and infrastructure. His explanation of capital amplification derived from the standardization, globality, and liquidity that is given to property by standard protocols and infrastructure echoes common reflections on the internet phenomenon.

  3. The Mystery of Political Awareness. Why have so many governments failed so badly at economic reform? Simply because they do not realize they are in the midst of their own Industrial Revolution, 200 years late. De Soto argues that the true extent of the shadow economy was unknown until recently, and methods of dealing with it are in process. It is refreshing to read something on this subject that acknowledges the hard work and sincerity of many of these governments, rather than rehashing accusations of incompetence and corruption.

    4. The Missing Lessons of U.S. History. How did the U.S develop an infrastructure that nurtures successful Capitalism? This section is an entertaining overview of the evolution of U.S. property law (believe it or not). What I found interesting was the way that 'law' would spontaneously arise in circumstances where the existing system was inadequate or non-existent. Also of interest were the examples of legislation chasing and converging (roughly) with reality over a century long period.

    5. The Mystery of Legal Failure. What legislation is required to = enfranchise the people of the Third World? Again, the author makes an argument for law tracking reality. In the Roman legal tradition, laws are not created, they are 'discovered'; the best laws are those that fit existing practice. Well intentioned land reform measures fail because they do not reflect the actual situation. People do not want to be uprooted, they want title to what they believe is theirs.

If anyone believes the answer to any these questions is either simple or boring, they are mistaken. De Soto addresses topics such as the nature of cash, the importance of responsibility, and the impregnability of badly designed bureaucracies in the course of his arguments. An especially harrowing read is his description of research detailing the steps required to get title to property in Haiti, the Philippines, and several other countries. Ith can take decades (decades!) and hundreds of transactions with dozens of bureaucracies to get clear title to land that a family may have lived on for generations.

De Soto tells a story about walking through rice paddies in Indonesia - = there were no survey markers or fences, but he knew whenever he crossed a property line - a different dog barked at him. He tells a group of ministers working on land reform to start at the bottom; listen to the dogs. and work up from there. His message is simple -- discover the law, then write it.

In each of these sections the author firms up his arguments with a = unique perspective based on solid research as much as theory. The final section of the book gives sober and well thought out step-by-step directions to lift people out of poverty and invisibility, again based on experience in field programs, rather than ideology.

This book is infused with a sort of passion that gives the arguments and figures an unexpected fascination. It is neither an anti-globaliztion rail nor a 'greed is good' apologia, but a well thought out investigation into a subject the author cares deeply about. For myself, I care little for economics, but I am familiar with engineering. De Soto approaches his topic like an engineer; he is interested not in promoting a theory, but in solving a problem.

I would recommend this book to two audiences: anyone interested in world poverty or economics, or those interested in the interaction and evolution of laws (ill-informed or not) and the Web. I would also recommend that we start barking.

You may find out more about the author at www.ild.org.pe.


You can purchase The Mystery of Capitalism from bn.com. Slashdot welcomes readers' book reviews. To see your own review here, carefully read the book review guidelines, then visit the submission page.

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Capitalism is necessary, but not sufficient (5)

YIAAL (129110) | more than 13 years ago | (#404658)

You need a free market, but free doesn't just mean free from governmental control. You need enforceable contracts, tolerably low levels of official corruption, and the right set of (usually unspoken) assumptions about how things work. The West has that; most other areas don't. Unfortunately, cultural changes take a long time.

link? (1)

Jozxyqk (16657) | more than 13 years ago | (#404659)

Hernando de Soto, for those unfamiliar, is an interesting character [slashdot.org] in his own right

The link leads to "http://slashdot.org/relevantlink.com".
Uh...?

hrm. (1)

fluxrad (125130) | more than 13 years ago | (#404660)

Hernando de Soto, for those unfamiliar, is an interesting character in his own right

and, aparently, with that link you gave us there, we're going to stay unfamiliar.


FluX
After 16 years, MTV has finally completed its deevolution into the shiny things network

survival of the fittest (3)

peter303 (12292) | more than 13 years ago | (#404661)

Capitalism doesn't prosper because is it is the nicest
or most logical system, but the most successfully
expansive. It grows beyond everyhting else.

Hernando De Soto (3)

jcapell (144056) | more than 13 years ago | (#404662)

Try THIS [reason.com] link.

This is clearly wrong (2)

Andy Tai (1884) | more than 13 years ago | (#404663)

That capitalism only works in the West is clearly wrong. It works in East Asia, where often democracy is lacking but capitalism succeeds. For example, Japan has been capitalistic since the last 19th century. Big business combines still control much of the power in Japan and South Korea. Taiwan, Republic of China's founding ideology is the Three People's Principle, which is very socialistic, but Taiwan was rated one of the most capitalistic region in the world. Not to mention the mainland region of China, under the rule of the Chinese Communist Party, where the so-called "Socialist Market Economy" is advancing rapidly to turn Chinese mainland into one capitalistic economic powerhouse, after the "Capitalistic Roader" Deng Xio-Ping's reform. ("Capitalistic Roader" was the term used by Deng's left wing opponents during power struggle in the 1970s before Deng's victory to power)

Capital is imaginary. (1)

Heidi Wall (317302) | more than 13 years ago | (#404664)

The Mystery of Capital. What is Capital, where does it come from? De Soto views capital as not just a proxy for physical assets, but as a side effect of of property laws and infrastructure.

Once upon a time, money was based on physical assets. Now capital has become fiduciary - meaning it is not based on any physical assets at all. To explain, in the UK one Pound Sterling used to be one pound of gold by weight. Now it is just valued for its intrinsic value to people. If noone exchanges money fro gold, the intrinsic value of money is irrelevant. Everyone wants money, therefore money is valuable, QED.

Let us examine what the effect of this will be in the new economy of the internet. Money is an imaginary and intellectual concept, and the internet is an imaginary real. We can then see that money is incompatible, to a certain extent, with the interent, or at least redundant. We are moving into a post-capital society, where the only thing of worth is the posession of knowledge and the spread of ideas.

According to Francis Fukuyama, the respected Japanese economist, the End of History is upon us, as all nations across the globe sink into the western capitalist ideal, and the divisions of old melt away into history.

In susch an environment money is irrelevant.

I predict, with reasonable certainty, that money will not exist in 25 years, and capital will be pure ideas.
--
Clarity does not require the absence of impurities,

Re:hrm. (1)

ZzeusS (206483) | more than 13 years ago | (#404665)

Yes, but it was a highly relevant empty link.

Greed is more effective than force (1)

browser_war_pow (100778) | more than 13 years ago | (#404666)

The main reason why capitalism works infinitely better than socialism is that capitalism exploits the greed inherent in human beings whereas socialism forces people at penalty of hard labor, inprisonment, execution or all of the above to work for the "greater good" of society. Offering the chance of a life of luxury is a much better way to get something done than sticking an AK-47 to someone's head and telling them to build a car or house.

Rather a USA-Centric world view, no ? (2)

Lord Hugh Toppingham (319381) | more than 13 years ago | (#404667)

I suspect that many Europeans would disagree that capitalism only works in the west. I would go one step further and say that Capitalism does not work in the USA. What you seem to have in the USA these days owes more the the 'Corporate State' of Mussolini's 1930s Italy than to any true notion of a free market.

Lets examine some facts.

1) America has the largest tax receipts of any country in the world. Hardly a Capitalist utopia.

2) America spends more on its miltary than any other country in the world. What exactly does this contribute to free trade ?

3) American corporations are amongst some of the most monopalistic [microsoft.com] in the world. Is this the free market ?

4) When forced to compete on a level playing field, US corporations fail dismally. E.g. the auto industry. You will not see ANYONE driving an Amercian car in Europe. Like most Amreicans, we would prefer a quality vehicle from BMW, Mercedez-Benz, Volkswagen, Seat, Skoda, Porshe, or even a Japanese made vehichle rather than the American low quality product.

5) Exploitation of resources and inefficiency. America leads the world in the destruction of the natural environment. Like the farme who eats his seed corn, they will surely reap their rewards.

Anyway In conclusion. There is little that the rest of the world can learn from America. Europe rejected Fascism in the 40's, America seems hell-bent on re-learning the same lesson Europe learned so long ago. It pains me to see it as I feel a moral reponsibility (since around 70% of Amercians come from my homeland).

Perhaps Americans who reject the direction their society has taken should return to the Motherland England, to like a more socially acceptable lifestyle.

We will put the kettle on for you and make a nice cup of tea :-)

Re:Capital is imaginary. (2)

m.o (121338) | more than 13 years ago | (#404668)

So, in 25 years, how are you going to buy milk and bread?

Capitalism hasn't failed everywhere else... (2)

Moderator (189749) | more than 13 years ago | (#404669)

It's just that everywhere else, people aren't giving it enough time. Capitalism didn't just start one day. It was a gradual process that evolved over hundreds of years in Europe and America. We had time to adapt.

Many people in third world countries want capitalism to bring immediate benefits to their standards of living. You can't go from agricultural to post-industrial society in ten years, folks. People need to give this process time.

--

Hernando? (1)

sunset (182117) | more than 13 years ago | (#404670)

Hernando de Soto, for those unfamiliar, is an interesting character in his own right.

Hernando de Soto [vashti.net] was a 16th century explorer. As noted already, the link in the article gives no clue who Hernado is.

Re:Rather a USA-Centric world view, no ? (2)

m.o (121338) | more than 13 years ago | (#404671)

So then how do you explain the fact that the US has the highest GDP per capita in the world (well, occasionally surpassed by the United Arab Emirates or Luxembourg for brief periods of time)?

Re:Capital is imaginary. (1)

muffel (42979) | more than 13 years ago | (#404672)

So, in 25 years, how are you going to buy milk and bread?
Milk and bread will be GPL'd

amazon reviews (3)

gargle (97883) | more than 13 years ago | (#404673)

Why not read the reviews at amazon [amazon.com] , for a more coherent description of what the book is about.

War... (2)

Anonymous Coward | more than 13 years ago | (#404674)

In A.D. 2101
War was beginning.

CmdrTaco: What happen ?
CowboyNeal: Somebody set up us the Troll
CowboyNeal: We get signal
Captain: What !
CowboyNeal: Main screen turn on
Captain: It's You !!
Katz: How are you gentlemen !!
Katz: All your Hemo are belong to us
Katz: You are on the way to destruction
CmdrTaco: What you say !!
Katz: You have no chance to survive make your time
Katz: HA HA HA HA ....
CmdrTaco: -1 every 'troll'
CmdrTaco: You know what you doing
CmdrTaco: -1 'TROLL'
CmdrTaco: For great justice

Re:Capital is imaginary. (1)

Anonymous Coward | more than 13 years ago | (#404675)

"We are moving into a post-capital society, where the only thing of worth is the posession of knowledge and the spread of ideas."

Huh? A house can't be built from ideas alone. I can't eat knowledge. The internet will certainly play a larger role in the economy than it does now, but it will never be THE dominant player.

You may have a point where the information market is concerned - we are already seeing that in the rise of open source software and the free exchange of information on the internet. Be careful not to read too much into that, though.

Re:Capital is imaginary. (1)

Anonymous Coward | more than 13 years ago | (#404676)

I wouldn't say that we are moving into a post-capital society, where the only thing of worth is the possession of knowledge and the spread of ideas. Granted, some of us are moving into a situation where we value ideas and information more than money. But that is only because we have so much money that we are comfortable; we forget its importance. If we had ideas but no money (i.e. no food), we would gladly exchange our ideas for the basic necessities. Ideas and information are something we use to occupy our free time- time we would otherwise be spending earning money. If you're in a position to value information more than money, you're probably making subsistence workers very envious. There's a strong chance that you're not contributing as much to the system as you're taking from it. And if there are enough people like you- people fondling data instead of building buildings, washing dishes, and growing food, then the economy and the overall standard of living could only go down. Unless, of course, if such tasks could be properly automated without cutting so many jobs that the economy collapsed in a different way.

No mystery (2)

ip4noman (263310) | more than 13 years ago | (#404677)


Capitalism is unsustainable, and the incredible growth of homo sapiens have enjoyed over the last 200 years (From 1 billion world population in 1800 to 6 billion today) is due to "spending" a bank account that was accumulated over billions of years: fossil fuels (source Thom Hartmann: The Last Hours of Ancient Sunlight [mythical.net] ). We have reached the maximum rate of extraction, and this rate will begin to decline, while demand and human population continues to grow *expontentially* (source: Jay Hanson [dieoff.com] )

If by "capital" you mean money, then follow some of these links to The Creature From Jekyll Island [google.com] By G. Edward Griffin: Money is not wealth, it is debt, perpetual debt, which can never be repaid (because the interest/usary is not created whithin the system), and thus always leads to bankruptcy, forclosure, "reposessions", sherrif's sale, and military actions, which the author calls modern Alchemy, since this is how the lead bullets of war are converted into gold.

Capitalism supports slavery. Capitalism encourages unsustainable population growth, depletion of natural resources, and the creation of waste products. "Property Rights" are paradoxical, since the enjoyment of this right must deny this very same "right" to another.

Isn't it time we figure out a different economic system that is sustainable, and less violent?

Ob Bill Hicks Quote on Economy:
I'm glad that psilocybin mushrooms are illegal. Because when I took them, I laid in a field of green grass, thinking "I love everything!" I realized that our true nature is spirit, and that it is only illusion that we are apart from God, and that God loves us. So, can you imagine what would happen if everybody started experiencing Universal Love? I mean, how are we gonna keep building Nuclear Weapons when we realize that we are all one? It'd fuck up the economy! --
Bill Hicks [sacredcowproductions.com]

pound sterling - silver (2)

Speare (84249) | more than 13 years ago | (#404678)

To explain, in the UK one Pound Sterling used to be one pound of gold by weight.

pound sterling [britannica.com] on brittanica.com

sterling [dictionary.com] on dictionary.com

Actually, a Pound Sterling was more typically a pound of silver, not gold, in value. Hence the term 'sterling silver.' The term 'sterling' refers to purity of gold or silver, but the Pound was of silver specifically.

Re:Capitalism is necessary, but not sufficient (2)

1010011010 (53039) | more than 13 years ago | (#404679)

Absoutely. And part of what the author shows is that, unlike the usual stereotype of anarchy, capitalism needs a strong government to work. It's just that, in a captialist system, the government work for and follows the people, rather than attempting to herd them "for their own good." I.e, capitalism requires a government for, by, and of the people.

- - - - -

Quibble (1)

localroger (258128) | more than 13 years ago | (#404680)

To explain, in the UK one Pound Sterling used to be one pound of gold by weight.

Actually, it was one pound of silver. There is no such thing as "sterling gold." :-)

Re:Capital is imaginary. (1)

truelight (173440) | more than 13 years ago | (#404681)

In 25 years, the goverment have given all citizens a nano-assember, that can make bread. In 25 years, the public will finally realize that milk is fraud, (osteroporosis is caused by lack of excersice, not lack of milk) and that 95% of the american population is lactose intolerant to some extent.

Re:Rather a USA-Centric world view, no ? (5)

Reality Master 101 (179095) | more than 13 years ago | (#404682)

What a steaming, stinking, unsightly pile of inaccurate information.

America has the largest tax receipts of any country in the world.

That receipts are irrelevent. America has only moderate tax rates (although still too high). They're not even close to the highest in the world.

America spends more on its miltary than any other country in the world. What exactly does this contribute to free trade ?

You're joking, right? How about, for one, the free-flow of oil at market prices? Or do you forget that Saddam dude who tried to take over a large majority of the world's oil supply? If the US hadn't stepped up, you would have a king of the "United Kingdom of the Middle East" by now. Stable economies require a stable world. A strong military is critical to stable economies.

When forced to compete on a level playing field, US corporations fail dismally. E.g. the auto industry.

The car companies don't care about exporting their cars. I was reading an article a few years ago about how the American car companies only recently produced a car that could be changed to have the steering wheel on the right side. The problem is that Americans like big cars, and the rest of the world doesn't. So it's not all that profitable for American car companies to produce tiny euroboxes that all have to be exported, since there is no market here.

In any case, I believe the Ford Fiesta (?) is one of the best, if not the best, selling cars in Europe, so they can do it if they care.

But going beyond cars, the US dominates in almost every industry that matters, particularly the leading edge ones like software.

America leads the world in the destruction of the natural environment.

Cite some proof. American is one of the cleanest countries in the world. In fact, I remember a british engineer who I met about 10 year ago who came over for some temporary work. I asked him what struck him the most about the US, and remarked he couldn't believe how clean everything was. Just an anecdote, but telling.

If you want to see pollution, take a look around Europe some time.


--

Theories of development (5)

skwang (174902) | more than 13 years ago | (#404683)

The final section = of the book gives sober and well thought out step-by-step directions to lift = people out of poverty and invisibility, again based on experience in field = programs, rather than ideology.

There are two main theories on how the developing world should move into the developed world. Currently, only 30 countries are considered "devloped," while the rest are divided among groups such as "developing," "not developing," and "less-developed."

  • developed countries = first-world = industrialized nations
  • developing countries = third-world
  1. Modernization theory (MT)

    MT prescribed that economic development requires the rejection of traditional behavior and orginizations, and acceptances of new behavior and orginizations that futher economic growth. The culture of a nation must change to the accepted western ideas of devlopment. A partial list of the requirements that Modernization theorists agree on include:

    • Education of the population
    • Acceptance of science, technology, and the scientific method
    • increased secularization/decreases religious tradition
    • urbanization
    • division of labor
    • rule of law
    • merit based system of rewards (as opposed to a system where people of a class or birthrite are rewarded)
    • social mobility
    • diversity
    • innovation and change

    In a nutshell, a acceptance of western culture and western sytle economic and policital thought lays the foundation of economic development.

  2. Dependency theory (DT)

    DT is a ideology that critisizes the MT approach. Two main tennents of Dependency theory: The development of third-world nations did not resemble the development of the west. The west's development for instance did not have external influences. The second tennent is that developed countries exploited the third-world in their own economic rise. Therefore any economic structure that may exist in a developing country is set up to enrich the industialized nations, not develop the third-world nation.

    Dependency theorists see the western exploitation of third-world nations as the primary roadblock to economic sucess. By removing the foundations rooted in imperialism, third-world nations and develop the economic structure that moves them forward.

I have not placed any value judgements on these two theories. All I can say is that I agree with the statement that there are no easy answers to how to develop the third-world.

Re:Greed is more effective than force (1)

xDe (264660) | more than 13 years ago | (#404684)

The main reason why capitalism works infinitely better than socialism is that capitalism exploits the greed inherent in human beings whereas socialism forces people at penalty of hard labor, inprisonment, execution or all of the above to work for the "greater good" of society

Your use of the word 'socialism' is not really accurate there - the sectors of most European economies which Americans tend to class as socialist are not based on coercion, but I see the point you're getting at. However, De Soto is not talking about the difference between capitalism and 'socialism'/communism here - he accepts that capitalism is a more successful system when it works. The question is why, when so many third world countries have ostensibly capitalist economies, does capitalism appear to fail (and, btw it is this very failure that makes extremem leftist solutions attractive to the poor in these countries).

The important point is that for capitalism to work as you suggest, it must succesfully exploit the greed inherent in human beings - that is, people must have a chance to achieve that life of luxury you mention. In many third world countries this is not the case because, although there is a free market economy, it isn't based on property rights. In a succesful free-market economy, almost all businesses require credit to get started - which requires collateral. In an agrarian economy, collateral usually means the land you own, but ownership is only meaningful if it can be legally defined, defended in court etc. This leads to the poor being reluctant to consider long term business ventures, simply because they don't have confidence that their current assets can be relied on long-term. The solution, according to De Soto, is not just a free market economy, but translating the already-accepted informal understandings of property ownership (ie. my land is here, my neighbours begins there, we both agree on this) to a formal legal framework.

Thank You Mike N! (1)

Anonymous Coward | more than 13 years ago | (#404685)

Very nice review of an important topic!! I would add one point: de Soto concludes that the value of property held, but not legally owned, by people living in developing and former communist countries is $10 trillion. That's a HUGE number. As other economists have pointed out, if those people could borrow against this property (i.e. mortgage the property)--and use the borrowed funds to develop businesses--we'd have gone a loooong way in fighting world poverty.

But lenders will only loan against property when they can be assured of being able to legally sieze the property if the borrower reneges on payment. This is why legal property rights are so crucial: to allow development of mortgages.

There has been a lot of uninformed anti-globalisation hype on Slashdot. I'm really glad too see good stuff like this.

The Obligatory Dig at Microsoft (1)

L. J. Beauregard (111334) | more than 13 years ago | (#404686)

From the interview:

...in Peru there indeed exists a private sector, but it exists largely on the basis of competing for government favors, contracts, and privileges, and its economic approach is to try to exclude or marginalize competitors--not by outproducing them in quantity, quality, or prices, but through political means, from legislation to outright use of the many resources of legal coercion at the disposal of a modern state.

If this weren't true in the States as well, we'd just laugh when a Jim Allchin calls open-source^W^WGPL'd software "un-American."


--
Ooh, moderator points! Five more idjits go to Minus One Hell!
Delenda est Windoze

Re:Capital is imaginary. (1)

e-gold (36755) | more than 13 years ago | (#404687)

Well, not ALL capital is based on imaginary stuff. There's a small but growing market for the real thing, too. (And just so this doesn't descend into absolute-shameless-plug-land, e-gold [e-gold.com] just got some competition, called Goldmoney [goldmoney.com] that's also based on grams of the filthy yellow metal). I've spent the last few years of my life studying the subject of Money pretty closely, and I'm still learning a lot. I think that electronic privately issued currencies (not just gold-backed ones, either) will change the world rapidly, and I hope Mr. DeSoto is right about helping the poor.

As more folks get used to it, I predict "grams of gold" will be the currency of the future on the internet if-and-when the dollar ever falters. As usual, anyone on Slashdot who wants can contact me and try a small spot of e-gold, as I want to encourage programmers to play with it (and the competition, even, but I can't give theirs away!). Thanks.
JMR

Capitalism and culture (4)

Alien54 (180860) | more than 13 years ago | (#404688)

It is interesting to examine the connection between the material success of a culture and the values of the culture itself. This is just another angle on the material of the book itself.

This shows up in many controversial areas.

For example, take the immigration from poor areas of the world to the richer areas of the world. The question here is how the culture of these immigrants is different from the country they are going to, and how important is this differance.

For example, if you have a town or village where the immigrants predominate, and have become a political force, what does the community look like? Does it look like and reflect the country that they are in, or where they came from? Typically, it looks like where they came from.

The problem is when this results in the same conditions that they left in the first place. Actually, it never gets that far, because of local ordinances, etc. but it does produce dramatic culture clashes. Southern California is an example of this. Xenophobia and prejudice are easy to develop under these conditions because in a democratic society, those moving in want things their way, similiar to what they are comfortable with, the way they knew it in their former homelands.

A less touchy example is when rich successful people buy a house in the country, after having lived in the cities all their lives. They get all freaked out by things like the smells of the local farms, and complain to the local town council, or whatever.

This becomes important when you are talking about things like how people deal with the basics of their lives, the economics, and how they create their own community.

Part of the problem is that many lack the lifetime of education in the culture of the country the aspire to, thinking that they must hold on to what they know already out of pride. They think in terms of either/or, or at least some political leaders do. The better would be knowing both.

This gets flipped on its head when we take this into another context completely. For example, the arena of the software market, open source vs proprietary software, etc.

As some may say, this is another can of worms entirely.

Re:Rather a USA-Centric world view, no ? (2)

abelsson (21706) | more than 13 years ago | (#404689)

GDP/capita does not a whole story make. And it has very little to do with quality of life. (the US for example has a lot very poor people along with a few extremly rich. Gives a high GDP but not a society that's "free and equal for all")

In UN's Human development index (here) [undp.org] the US is #3 after Canada and Norway. But when you compare gender equality and conditions for the poorest part of the population the US drops down to #18th place, among the last of the industrialized world. All of scandinavia for example is a much more wellrounded society to live in - one that doesnt focus exclusivly on profit at any price.

-henrik

Re:Capital is imaginary. (2)

truelight (173440) | more than 13 years ago | (#404690)

You cant build a house from dollar bills either, and you can't eat coints. I find it rather pathetic that we should pay for thing such as living space and food. Those things should be provided by society for you. That way people could focus on achieving greater things, instead of worrying about if they are going to pay the rent.

Why not everywhere, then? (2)

Russ Nelson (33911) | more than 13 years ago | (#404691)

So why is capitalism not ascendant everywhere? Your theory doesn't explain all the facts.
-russ

Re:Capital is imaginary. (1)

MwtrV (311470) | more than 13 years ago | (#404692)

Boy, you sure seem to have set your record with this one -- in inane, assinine, senseless ideas. "Money is an imaginary and intellectual concept, and the internet is an imaginary real." Imaginary real? Isn't that a contradiction in terms? "We are moving into a post-capitalsociety, where the only thing of worth is the posession of knowledge and the spread of ideas." Give me a break. What do you think is inspiring the development of new ideas? Knowledge may be free, but, more importantly, the implementation of ideas is usually not.

"I predict, with reasonable certainty, that money will not exist in 25 years, and capital will be pure ideas." So what happens to the rest of America who is working for these "pure ideas"? How are these ideas compensated? It sounds a bit reminiscent of Communism, when you consider a system that does not compensate workers with capital/money.

You, lady, are a windbag. Even (yes, possible!) moreso irritating, you never reply to any valid arguments in response to your idiotic rantings.

I personally theorize this person is an artificial intelligence program gone horribly awry. And I think it's irresponsible to see her posts moderated up (especially ones like this) when they contain such logic that is so broken down and unsupported. Just because someone can state an idea eloquently doesn't mean it's worthy of moderation points, especially if all they're communicating is a bunch of bullshit.

Money will always exist. (2)

Russ Nelson (33911) | more than 13 years ago | (#404693)

"Money" is just something that people generally will trade anything for, and will accept in trade for anything else. Money, being a thing, has its own intrinsic value which, like anything else, goes up and down in price. Money will always exist, because it is needed to keep the cost of trading things low.

Read Von Mises' _Human Action_
-russ

Re:Rather a USA-Centric world view, no ? (3)

Anonymous Coward | more than 13 years ago | (#404694)

1) America has the largest tax receipts of any country in the world. Hardly a Capitalist utopia.

It also has the largest economy in the world. It's percentage of GNP collected as taxes is much lower then most other industrialezed countrys. (16% of 8 trillion is a lot more (dollar for dollar) then even 50% of 2 trillion)

2) America spends more on its miltary than any other country in the world. What exactly does this contribute to free trade ?

While I would be first to agree that the lobbying power of the military industrilal complex first warned about by eisenhower is too great. The military is frequently used to directly intervene when americas intrests or americas allies (who are usually are trading partners) are threatened.

3) American corporations are amongst some of the most monopalistic in the world. Is this the free market ?

America is the one maybe the only nation that actually says a corporation must justify its monopoly is in the public interest (and meet conditions about not expanding, you know that lawsuit against microsoft?) in other nations paticullary in canada and europe, state enterprises are allowed to be as inefficient and damaging to consumers and the economy as a whole. On this point a little more, monopolies can't flurish in a economy without goverment protection even the much maligned standard oil was disintergrating at the time the goverment decided to enact anti-monopoly regulation (of course you can trace the standard oil monopoly to the monopoly granted to the rail roads by various goverments).

4) When forced to compete on a level playing field, US corporations fail dismally. E.g. the auto industry. You will not see ANYONE driving an
Amercian car in Europe. Like most Amreicans, we would prefer a quality vehicle from BMW, Mercedez-Benz, Volkswagen, Seat, Skoda,Porshe, or even a Japanese made vehichle rather than the American low quality product.

Well, considering Diamler-Chrysler are merged, Diamler-Chrysler owns Mitsubishi, other of the big three own various japanese car companies (lexus and nissan), ford is a huge player in europe as well. Indeed american companies don't market american cars in europe because of narrow minded biggoted opinions such as this, american cars are probably not built aswell but they are built so that as many people as possible can afford them, you also ignore brands like cadillac.

Americas strong belief in capatilism and education allwos american companies to thourly trump any competitor we are far more productive that any nation in europe, machine tools, electronics, computers (funny because they basically originated in britain), optics, fibre optics, medical science, biotechnology, and on and on and on.

5) Exploitation of resources and inefficiency. America leads the world in the destruction of the natural environment. Like the farme who eats his
seed corn, they will surely reap their rewards.

Actually there are many countries with far worse enviromental records then the U.S. even in "enlightened" countries such in europe or canada, canadians by the way waste far more watter then americans per captia, and there corporations are responsible for some verry disgraceful enviromental and human rigts abuses in africa and elsewhere. Infact many of the "enlightened" nations practice NIBYISM (not in my backyard) but there (even state owned) business are perfectly willing to fund or even praticipate in the pilliging of other nations.

>Anyway In conclusion. There is little that the >rest of the world can learn from America. Europe >rejected Fascism in the 40's, America seems
>hell-bent on re-learning the same lesson Europe >learned so long ago. It pains me to see it as I >feel a moral reponsibility (since around 70% of >Amercians come from my homeland).
Europe rejected fascism ? maybe britain did but most of europe was pefrectly happy to run away from the defence of freedom. Not to mention the fact that after we one the war (not of course dismissing the importance of britain, but you needed not just are milltary might but our industrial might to defend yourselves, you know the thing your maligning.) Indeed no good deed goes unpunished we also spent 50 billion dollars rebuilding western europe, yet all we have ever got is grief.

>Perhaps Americans who reject the direction their >society has taken should return to the Motherland >England, to like a more socially acceptable >lifestyle.
Funny, really, what europeans don't really seem to realize that wealth == freedom, you complain about our excess but the excess that allows the even a realitvely poor person to buy a car and have gas to put in it, why is this important well it means that with this car if there are no jobs where the person currently resides can travel somewhere else . Same goes for many other things, computers and internet access for instance.

Re:No mystery (2)

Russ Nelson (33911) | more than 13 years ago | (#404695)

Man, oh man, oh many, you are a hopeless case, aren't you?

By "capital" he doesn't mean money. Capital is not money. Capital is saved wealth. Money is just a thing which is easily tradable. Anything could function (better or worse) as a money. Money, being a thing, is not "debt". Where did you get that crazy idea from? Oh, I see, Griffin. Well, why did you accept that crazy idea into your brain?

Essentially, you are against saving. You would rather that people live like the animals of the woods, eating when food is available, and starving when it is not. YOU are welcome to live like that. Nobody is stopping you. Most people would prefer not to live that way, though. That's why socialists have to use force to get people to live in a socialist society. Note: Sweden (the canonical "socialist" society) is not socialist at all. It is a market capitalist society with high government expenditures. A socialist society is marked by a lack of a market (go read your socialist literature if you think I'm nuts). The extent to which socialists support the market, is the extent to which capitalists have persuaded socialists that socialism does not work.
-russ

Re:Theories of development (2)

Russ Nelson (33911) | more than 13 years ago | (#404696)

Well, no, there are no easy answers to how to develop the third world *quickly*. The easy answer is "Do it like we did it. Take several hundred years of negotiations, invention, and saving". Most people are looking for an answer which produces results faster than that.
-russ

Re:Greed is more effective than force (1)

truelight (173440) | more than 13 years ago | (#404697)

Whoa! I live in Sweden, which is socialistic, and I have never had an AK-47 pointed to my face. In fact, socialism also exploits the greed in human beings, just not to the extent capitalism does. The difference is that I, as a student, recieives 100$ a month, just for studying. It's quite enough to give me food - if my parents did not buy all such stuff for me - I generally use it to buy Red Bull, and hardware. But such thing can make it easier for people which did not have a good start, like me. Also, the Swedish government is now into a project with $1 billion in it, which aims to have provided broadband to the ENTIRE Swedish population in 2002. That would not happen in a capitalistic society. I'm not saying which form of government is superior, that's a matter of taste, and personal preference, but I will say that you are quite wrong when you state that capitalism is "infinetly" better. Better at some points, yes, but socialism provides me, on the country, with broadband, and I like that.

Re:Rather a USA-Centric world view, no ? (2)

abelsson (21706) | more than 13 years ago | (#404698)

First you state "Americans like big cars" then "American [sic] is one of the cleanest countries in the world". Cars are one of the major sources of pollution, about 25% of total. Big cars use more fuel, need more material, bigger roads, etc. They pollute more by any standard.

And on a second note.. The US was the country that shot down an international enviromental treaty recently. hell, most USians dont even belive that global warming exists even when most of the world scientists tell them. The US polludes more per capita than any other country. period. And worse than that, it does every little about it. I wouldnt care if you wanted to wreck your own place, except i live on the same planet too. Yes, i've lived in both US and Europe. I found the US *much* *much* worse enviromentally.

The US is a single-issue country (profit über alles) just like most developing contries. Only in long time, stable societies to you see ethical values being a major part of the debate. I'd say europe in general is 50-100 years ahead of the US in the ethical evolution of mankind. Most of europe recognizes that the enviroment, equality and social security is what a society needs to focus on for the next century. Building as many (large) cars as possible no matter what the cost isnt reasonable.

And profit isnt the only thing that matters.

-henrik

This reminds me... (1)

Marketolog (161923) | more than 13 years ago | (#404699)

Any of you read "Dead souls" by Gogol?

The guy has been buying "soles" (a word in which peasants were counted) of dead peasants in Russia, thus becoming very "rich" and admired. It all blew up, when people discovered that the "soles" were of dead people. Ditto happens today with some Tech shares. Capitalism at its glory...

Re:No mystery (2)

localroger (258128) | more than 13 years ago | (#404700)

While I basically agree with your main point, there are some flaws in your supporting argument.

We have reached the maximum rate of extraction, and this rate will begin to decline, while demand and human population continues to grow *expontentially*

We have reached the maximum rate of extraction at current pricing levels. Anyone in the oil industry will tell you there is a huge amount of oil offshore in the Gulf of Mexico; the reason we aren't extracting it is that it is cheaper to import from the Middle East than to build drilling platforms. But as the technology to do deep-water extraction improves and the value of the fuel increases, these sources will be tapped. And they are very extensive -- sufficient, by most estimates I've heard, to power our civilization at its current level for centuries.

And while we do need to achieve negative population growth, experience shows that the best way to do that is to increase individual wealth. The nations with the lowest population growth are all the ones with the highest standards of living.

And for all its flaws (and it has many), capitalism has proven to be one effective tool for increasing productivity and standards of living. It's not the only thing you need, which is one point the reviewed book is making; but it is one thing that can work in appropriate circumstances.

Unfortunately, the current trend even in wealthy countries is for capital to accumulate around the wealthiest at the expense of the poor, which is a sure recipe for reversing the progress we have made toward long-term stability.

Re:No mystery (1)

maligor (100107) | more than 13 years ago | (#404701)

>> Capitalism encourages unsustainable population growth

I don't see how this is true, at least norhern European countries have started to get to the point where birth rate and death rate is nearly same, or even that there are less births than deaths per year (But even so the population levels tend to go up due to immigrants).

In a capitalist system the costs of raising a child and the strain it causes in addition to the job you have to goto to get that money I don't see how this could be true even in an ideal capitalist country. Not as long as there is Democracy involved anyway.

Re:amazon reviews (1)

psin psycle (118560) | more than 13 years ago | (#404702)

Because they patent stupid things like one-click shopping and we are all supposed to go to noamazon.com [noamazon.com] instead.

Re:Capital is imaginary. (1)

nido (102070) | more than 13 years ago | (#404703)

Yes, money used to be based on physical assets. It is no longer that way because people in "government" are afraid of the responsibilities of gold - if you're a politician and you need an extra $100 million for your project, you can't just call up the fusion reactor people and tell them to cook up some gold coins like you could fiat currency from the printing press.

This article [winwenger.com] talks about the creation of a computerized bater system to enable local economies to strengthen themselves. Such a system would enable your "environment where money is irrelevant," but for a different reason.

I'm (gradually) moving away from using fiat currency myself. E-gold [e-gold.com] presents a viable alternative to government fiat money systems of the world, and is my payment medium of choice. E-gold isn't perfect, but at least I don't have to rely on the belief that others will find my pieces of paper worth trading for.

---

---

Re:No mystery (3)

the eric conspiracy (20178) | more than 13 years ago | (#404704)

Capitalism is unsustainable

Remains to be seen.

the incredible growth of homo sapiens have enjoyed over the last 200 years

... has nothing to do with capitalism. In fact the capilistic countries have the lowest population growth rates.

human population continues to grow *expontentially*

Bzzzt. Population growth rates are declining. In fact some western countries have birth rates lower than the replacement rate, and are only maintaining their population through immigration.

If by "capital" you mean money,

No, we don't mean money. Any jackass with a printing press can make money. Money existed long before capitalism.

Isn't it time we figure out a different economic system that is sustainable, and less violent?

Sounds good. Do you have any ideas? We've already tried a variety of methods including feudalism, tribalism, and communism.

Capitalism supports slavery.

What capitalistic countries currently use slavery?

"Property Rights" are paradoxical, since the enjoyment of this right must deny this very same "right" to another.

True enough, except that the concept of 'Rights' itself implies that you have taken away something from another individual. For example, my right to life means that you do not have the right to kill me. Are you really proposing that indivduals should have no rights?

Come back when you have a premise that is not filled with logical fallicies and factual error.


MOVE 'ZIG'.

Re:Greed is more effective than force (1)

pjpII (191291) | more than 13 years ago | (#404705)

I would question the basic assumption here that drives your thesis- that humans are inherently greedy. I don't think this is necessarily true, and indeed, I think that this idea is very culturally specific.

Most cultures that haven't yet been westernized DON'T experience the massive levels of greed that plague our society. The collecting of food, for example, is done collectively or individually in many "primitive"(ie, non-industrialized) societies, and it is redistributed to a wide group of people. Among the Netsilik Inuit, families live with several other families. When one hunter catches a seal(their primary food), he shares the liver of the seal with the other hunters in the group. Additionally, they play a game in which every man in the group places a valuable object(like a bowdrill, a harpoon, etc) in a pile, and the winner of the game gets to pick which object they take. This isn't about greed- its about fair handed redistribution.

There are more examples from non-western societies. Aboriginal Australian hunters would get the worst part of the animal that they killed, and give the best parts to the rest of their group. Among Tongans(granted, this is after a great deal of western contact, but they've managed to keep some of their culture), there are savings groups where everyone gives $2-$4(Tongan, 1980 dollars) to a central pot every two weeks, and then the pot is given, in order, to every person who submits the money, until everyone who's given money has received the pot, at which point they start over.

There are millions of examples of societies that cooperate, and do not need monetary recompensation for every action that they perform. Our society believes, however, that personal gain is the be all and end all of human nature because this is a very useful cultural ideal in a capitalist nation. Indeed- it is a cultural value that is probably specific to capitalist society, and it has been making the wheels turn nicely for hundreds of years. Or at least, making it APPEAR like the wheels are turning nicely, whether they have or not.

PS- Your other assumption, that force is less useful that offering a vision of a "life of luxury" is not specific to socialist societies. In capitalist societies, we use force(physical or economic), or the threat of force, as the primary motivating factor in many instances. In fact, not too long ago, it was the main method of dealing with dissidents in the US. The Lodlow massacre is a good example in the US, and there are many, contemporary examples of physical force being used abroad to control capitalist labor.

Alex Magidow

Re:No mystery (1)

truelight (173440) | more than 13 years ago | (#404706)

Well, Sweden is nor a socialist society, nor is it a capitalist society. This is how it stands: Our goverment is dominated by the "Social Democrats". They are of socialists, but with liberal spice"

Then there are "Moderaterna", the most right-wing party in the government - which are corresponding to the "Democrats" of the US. Then of course, there are the "left party", some of them are communists, some are capitalists. So, due to the fact that we ARE a democracy, we are not a truly socialistic. However, I dont think it would pose any problem if power was moved to the more socialistic left wing.

Oversimplification .... (4)

LL (20038) | more than 13 years ago | (#404707)

If you follow the Austrian School of Economics (yes, there are competing schools of thought e.g. Chicago School of Rational Economists, etc), then you realise that capital is a heterogeneous structure of productive elements. People tend to confuse the accounting unit (monetary value) with the tangible/untangible asset (essentially a service generating a revenue stream). Why has the West succeeded as compared with the East? There are a lot of competing claims but I will offer a few generic observations:

- alienation - or the separation (and resulting specialisation) of powers. The modern corporation essentially has 3 functional components - owners (shareholders), governance (directors) and operators (managers). Through legal mechanisms, the transfer of powers and associated trust allows more complex structures to be established. Due to historical baggage of feudal governance structures and patron-style relationships, the East has yet to develop a culture which separates the State from the individual biases. Even if you look at places like Singapore, it is essentially a city state driven by a family core (think Italty) and as a result some financiers are rather disparanging of the capital utilisation rate (compare growth in TFP against other states after discounting human and capital mobility). The alienation eliminates (at at least checks to a large extent) influences such as religion, tribalism, etc from economic factors. The downside is that the government is less powerful than many people think.

- agency costs - consequent to this is how do you ensure that the remote agents (managers/financial brokers) work for your aims (wealth creation) rather than pissing off to South America with your loaned capital. Again the rise of a professional management class as distrinct from a family owned firm with a tendency to treat OPM (other people's money) as personal disposable income allows larger scaling of enterprises. This has been aided by the significant reduction in the cost of internal communications due to technology and now you have firms which number employees in the hundreds of htousands (as compared with 100-1000's early last century). Scale matters and family firms don't have guarentee of talent.

- universal education and democratisation of capital - one of the biggest hinderances towards an efficient market is information asymmetry. What you don't know *WILL* hurt you when it comes to insider information, scams, and other forms of white collar crime. By giving the middle class the chance to pool funds into mutual investments, and the transparency to assess companies in their own right, a more accurate picture of the economy can be reflected in the prices that people are willing to lend at. If you take a look at the share-market in say China/HK, if you are not a professional market specialist, you might as well be gambling at your local casino as minority shareholders get screwed big-time.

- credit creation - the unbundling of the currency from any tangible asset such as the gold standard. This is a rather contentious fiscal "innovation" as it creates inflation (e.g. 70's) but the upside is that greater individual risks can be undertaken (with resulting higher returns). There are some serious side effects (financial crisis/flutuating financial securities) but the industry has developed more advanced liquidation techniques to reallocate capital as a result. As a result, the US financial markets have been more efficient at directing capital to product uses (c.f Japan industry boondoggles) despite its current lower (negative?) savings rate.

I'm sure any professional accountants and economists will harp on about a number of other factors such as anti-trust law (one advantage over Europe), intangible property rights (branding, etc) or derivatives to transfer/concentrate risks but IMHO the above are the main structural elements. This is not to say that all is milk and honey, governments, corporations and individuals have been known to screw up but at least the system has a chance to self-correct. However, it should be noted that people in other countries are not stupid and they can read the books on financial as well as any other capitalist. It also discounts certain elements such as social capital whcih is prized much more highly in the East due to higher population concentrations. The other potential problem I see is institutional arrogance ... just becaus you are successful now doesn't mean you will always be right. Deeming couldn't convince the American manufacturing industry to take his ideas seriously and as a result the Japanese have now supassed the US in that sector. Given the huge population mass and desire of normal people to improve their lot, there's no reason why India couldn't overtake the US in software services or the Chinese in Engineering Knowledge. In short, the future is unpredictable but a rising tide raises all boats.

LL

Nonsense. (2)

jcr (53032) | more than 13 years ago | (#404708)

Money is not debt, money is a medium of exchange.
Debt is an obligation on the part of one person to pay something (usually money, but it can also be labor or some commodity) to some other person.

-jcr

Money is not Capital (2)

SimonK (7722) | more than 13 years ago | (#404709)

The book being reviewed is about capital. Your comment is about money. Capital is productive property, and as such can consist of ideas, land, machinery and even personal skills in some views.
Money is a reliable store of value that is accepted in exchange for other good.

Both capital and money are social realities: there's nothing "imaginery" about it. If I try to pay for dinner using a turnip, patent water or enclose the center of London to graze my cows I'll soon discover that imagination is not enough.

The Cult of Capital... (2)

The Original Bobski (52567) | more than 13 years ago | (#404710)

...would have been a better title for at least the alliteration, besides being appropriately descriptive.

When do you own the land you are living off ? (2)

mami (209922) | more than 13 years ago | (#404711)

Seems to be a great book and can't wait to read it. Reminded me of observations in an Central African village where land ownership (of tropical rain forest land) had not yet been recorded.

Land is considered as being owned, as soon as a man is able to own a woman, who can cultivate a piece of land and provide food for survival for the man and her children.

The man, being asked if he owns land, would say yes, as long as he owns the labor provided by the woman.

The woman would say she doesn't own land, but she is paid for her labor in being allowed to eat and survive on the fruits of her labor. If she is able to produce more food than the family can eat and is able to sell or trade food for other goods then the struggle who owns the traded goods (or the money she got from the sale) starts.

It seems mostly dependent on how much labor the man has put in to cultivate the land himself. If he did, he will claim ownership of the profit made by the woman's labor, if he didn't and the woman was able to make a profit out of her labor, she considers the profit hers, but not the land itself.

If the woman doesn't work the land anymore, the land isn't considered worth anything and no ownership of the land itself is claimed by the man, but certainly the worth of the potential labor inherent in the woman, is still being claimed to be owned by the man.

In this context it makes sense that the capital of the man is measured in how many women he owns.

The moment an international company comes to the village and discovers something precious to the industrial world in the soil (gas, oil, uranium) and wants to exploit the land, the land will be claimed by the native population as being owned by them. The native population will request recording of the land's ownership, without any consideration of the ownership of women's labor. Because it immediately becomes clear that the profit out of the company's labor is higher than anything the women's labor could generate.

The ownership of the land therefore seems to be defined by who owns the labor put into the land to generate a profit out of it. As soon as the profit is more than just the food to sustain survival of the native population recording ownership takes place.

When Lincoln requested in the Homestead Act that anyone who claimed ownership of the granted acres of land must prove within five years that he "worked" the land and generates value to that land, this seems to reflect that the real capital is reflected in the labor you put in to the land to generate something of value which can be traded and not in the land per se. The native Indians never claimed to own land ( I think), but they fought wars for their tribes territories. In the terms of de Soto, they barked quite a bit.

This would basically mean you always claim ownership to what you produce with your labor. And any person will always claim that much land as his own land, as he needs to grow food to survive. We always start barking if someone tries to take that away from us and we should.

Wuff, wuff, I am off to the bookstore. Thanks for pointing this book out to us.

Re:No mystery (2)

SubtleNuance (184325) | more than 13 years ago | (#404712)

Excellent points - that is the most salient and aware writing ive read in this thread.

Capitalism in its Western incarnation is a straw-man. You cannot spend your capital (oil, ore or mineral) and call it 'income'. This is like my basing my future on the sale of my home - it works for a few months (where im spending the cash that i'd saved into my home) but quickly becomes a problem when I have no other home to sell...

On a similar note - the Capitalist measure of the economy is not a measure of 'success'. The GDP is another display of 'wrong' thinking inherent in the capitalist system. When a person gets cancer - the GDP goes up. When we are in a car crash - the GDP goes up. What about our real goals: happiness, peace, love, understanding, joy and their ilk? I propose we organize a system that only serves those goals.

See a link at Adbuster [adbusters.org] that deals with some of these ideas - much better than I can explain them ;)

Simply: Join the effort to End Plutocracy.

Re:Capital is imaginary. (1)

michael_cain (66650) | more than 13 years ago | (#404713)

I predict, with reasonable certainty, that money will not exist in 25 years, and capital will be pure ideas.

Money is a means of exchange, a way of seperating a sale by one person from a purchase by another. Without money, everything is barter. Paper money may disappear for something more convenient, but "dollars" will still exist. Even today the most restricted definition of "money" used by the Federal Reserve is much larger than the amount of currency.

Capital is accumulated money, or the things that can be acquired with accumulated money. The "new Internet economy" is highly dependent on capital. How long is it going to work without computers, routers, fiber optics, cable modems, the factories that build those things, the infrastructure for shipping them, power plants to generate the electricity they slurp down, etc?

Certainly ideas can be valuable, hence "intellectual property". But in order to feed me, my ideas have to be shared with others who will exchange other goods/services for them (or money!). I work for a company that pays me to have ideas for services that they can provide to other people in exchange for money. They give me some of the money in advance, assuming the risk that the ideas are good and will generate more money for them in the future.

Even the solitary creative artist has the same problem. The idea (eg, magnificent song about unrequited love) is valuable, but must be converted into a "thing" in order to exchange it with other people. Money makes such exchanges easier (sing for cash, not for a beer). Capital provides the means to produce more efficient ways of exchanging (press a million CDs, don't just sing in the corner bar).

Re:Thank You Mike N! (1)

philipm (106664) | more than 13 years ago | (#404714)

I agree, its a nice article. I enjoy reading REASON magazine.

As with all counting, the people doing the counting only count what they want to count. Just like US economic indicators are composed of rich people's money/"property", so are Peru's.

If I rent a place for 5 years, shouldn't I become the defacto owner? If I am one of the 500 employees working five years at a company shouldn't I have 1/500 of that company?
If only possesion WAS 9/10th of the law.

I'm not sure if I agree with your assertion that mortages are helpful to poor people. But I guess you have to create fake value (mortages) out of something that you just stumbled upon, so you can have more fake value later.
Maybe we should have a trade system that explicitely tracks more than one kind of money, with one scale being for doing good deed or something.

E-gold is a great idea, but... (2)

jcr (53032) | more than 13 years ago | (#404715)

I'm afraid that its impact will be negligible until and unless a national government somewhere issues a gold-backed currency.

Imagine for a moment, that South Africa issued a digital Krugerrand.

The DKR would be a nice, long number, and if you present it at any branch of any South African bank worldwide, and you're the first person to present that number, they hand you the coin. Various cryptographic protocols can ensure that you're very unlikely to simply guess a valid number.

South Africa would make a fortune on the seniorage, and all of their gold buyers then have a currency available which is not inflatable. Once people get used to the digital gold coin, then we can start seeing digital currencies backed by any other kind of commodity or service (say, Kilowatt hours, or BTU's of home-heating from somebody's natural gas pipeline.)

Ultimately, it will benefit the whole world to have currencies that simply aren't subject to manipulation for political ends, that rise and fall against each other in response to actual market conditions.

-jcr

Re:Capital is imaginary. (1)

TGK (262438) | more than 13 years ago | (#404716)

"We are moving into a post-capitalsociety, where the only thing of worth is the posession of knowledge and the spread of ideas."

So you think that someday wealth will be determined by the ownership or possession of intelectual abstracts, which, due to monopolistic controls, will have an inherently overinflated value?

Do you work for the RIAA or something?

This has been another useless post from....

Re:Capitalism is necessary, but not sufficient (2)

Jonathan (5011) | more than 13 years ago | (#404717)

capitalism requires a government for, by, and of the people.

There is a common belief that capitalism and democracy go hand-in-hand, but there is at least one rather obvious exception: Singapore. There's a country that is as capitalistic as possible, with McDonalds and Gap stores on every block, and yet has a rather oppressive government.

Re:This is clearly wrong (2)

Delambre (237829) | more than 13 years ago | (#404718)

I don't believe the central thrust of the book is that only countries that are physically located in the Western hemispheres are capable of sustaining workable capitalism. I think the point is more that one needs a Western-style legal system to do so.

I admit that I don't know enough about these Japan and South Korea to speak at length on their economies, but both are well known for "crony capitalism" where connections and political clout are far more important to the success of a business than the quality of its product or efficiency of production. One might argue that the US is quickly moving towards such a state, but that's another issue.

Del

Cultural Relativism bs (2)

AntiBasic (83586) | more than 13 years ago | (#404719)

This book shows something that is highly politically incorrect. A lot of it deals with "cultural relativism" thats been all the rage by conformist rebel liberals for the past twenty years or so. Some cultures facilitate and nurture progress exponentially faster than others. Yes there are other externalities that have hindered progress but thats like saying everyone is fat because of a glandular problem.

Now this isn't to say that race X is superior to race Y (as many drones are quick to play the race card). But a society that has perfectionist attitudes doubled with a "keeping up with the Jones'" outlook have and do progress faster.

Adaptation is necessary for progress. The Europeans took a lot of the practices from the Muslim world under Sulliman(sp?). And before that, the Muslims copied the Indians who were benefitting from the Oriental societies who were the mightiest of the time. Think where we would be if Pope Sylvester the II hadn't been educated by the Muslims; he's the one who introduced arabic numerals to the west. The western world has only been dominant now for at most 500 years (and some would say for less).

Another instance is with the US and Japan. Japan was still a feudal society until the end of the 19th century. The Americans came into the Japanese harbor and let off some cannons. The Japanese were impressed. They realised their ways were inferior to the industrialized western ways. They sent their scholars to the US and Europe to learn all that was possible. And after 40 years they were as advanced as any western society.

Re:pound sterling - silver (2)

SpinyNorman (33776) | more than 13 years ago | (#404720)

Thanks for that pound sterling link!

I'm a Brit (living in the States now), and I'd never heard of the sterling coins, or the derivation of "pound sterling"!

It's interesting that the 240 sterlings created from a pound of silver in 775 - presumably a somewhat arbitrary number dictated by the size of the coin, survived for over 1000 years! More the shame that decimilization ended that piece of history... reading that actually makes me care less now whether the UK adopts the Euro, since the decimilized "pound" is only part of history in terms of name alone.

BTW, when did the pound cease to be silver backed? I seem to remember that the old pound notes carried the "I promise to pay the bearer, upon demand, the sum of one pound" verbiage right up until the end.

Re:Why not everywhere, then? (2)

SpinyNorman (33776) | more than 13 years ago | (#404721)

Capitalism is displacing communism in the former USSR, eastern europe and even china (more slowly), so I think it's a little early to say that it's darwinian progress has halted.

Re:Rather a USA-Centric world view, no ? (1)

Anonymous Coward | more than 13 years ago | (#404723)

All of your "facts" depend entirely on the statistical equivalent of fool's gold.

1) As a percentage of income, taxation in America is BELOW the 50th percentile of all countries. It's the shear size of the American economy that makes the receipts so large.

2) As a percentage of GDP, America spends less on its military than 97% of all countries. That's not a typo. Ninety-seven percent! Again, it's the shear size of the economy that makes the actual dollars figure so big.

3) Microsoft is, as the veterinarian says, being "fixed", just as Standard Oil and AT&T were. Please be patient, these things take time.

4) What makes you think the US market isn't level? American car companies do quite well here, and European manufacturers don't. I don't, however, draw the same conclusion as you that European companies can't compete. They merely do best in the market they know best - their own.

5a) A European calling the US inefficient is like the pot calling the kettle black. Go to Japan if you want to see efficiency.

5b) Exploitation of resources is a endemic problem everywhere. The only countries that don't have these problems are countries that don't have resources. Rather than bitch that a particular country has this problem, why don't you suggest a solution for ALL countries? In MNSHO, the root of the problem is overpopulation, but I don't know of anyone willing to die to correct that.

As far as moving to Motherland England, I have a friend who is going to do just that. He doesn't like tea, though.

Re:Rather a USA-Centric world view, no ? (2)

SubtleNuance (184325) | more than 13 years ago | (#404724)

healthcare but is definately not uniform and the quality is at best tenious (tenuous maybe?)

Utter bullshite. Ive never had a problem with healthcare here in Canada. If Im sick I get care. Simple. This holds true for 'serious' illness as well (ive had immediate family members with exceptional care during their successfull battles w/ cancer).

a by-product of the large concentrations of people

Bullshite again - The US has high crime beause of its value system. People are more likely to feel justified in their violent acts because it serves their selfish needs (whatever they are) - and that is the #1 value in America: You are the only important thing to yourself - Serve yourself - Consume. America does not have a 'high concentration' of people [reliefweb.int] - look at the other end of the population density scale (Asian countries) and you'll see an inverse violent crime rate to that of the USA.

Get your shite straight.

Speculative Capital (2)

MeanGene (17515) | more than 13 years ago | (#404725)

For a very unorthodox take on the modern capitalism, I suggest "Speculative Capital (vol.1) - The Invisible Hand of Modern Finance" by Nasser Saber. You can read parts of the book here [saberpartnership.com] .

Briefly, the author explains the evolution of different forms of Capital: merchant, industrial and, finally, speculative. It is the "Speculative Capital" which scouts the planet for instanteneous profits and has the potential to destroy the whole system as it puts on larger and larger bets.

Ever increasing volatility of Nasdaq, well-publicized devaluation of British pound commonly attributed to George Soros, meltdown in Southeast Asia, and, most recently, Turkish devaluation are the symptoms of Speculative Capital.

Check out Saber's website [saberpartnership.com] for better explanation of the subject.

money is an agreement (2)

zerone (83179) | more than 13 years ago | (#404726)

Bernard Lietaer at transaction.net [transaction.net] has plenty of interesting ideas about money, drawn from his involvment in the global monetary system five ways: from a multinational corporation to a developing country viewpoint, from an academic to a hands-on central banking and currency speculation viewpoint.. He concludes that greed and fear of scarcity [transaction.net] are in fact being continuously created and amplified as a direct result of the kind of money we are using, and that we can use the 'net to create abundant, sustainable alternatives.

The trick seems to be to limit "money"'s capacity as a *store of value* and so expand it's use as a *medium of exchange.*

Silvio Gissel's "demurrage [slashdot.org] currency" model does this. Demurrage charged currency restricts a user's freedom to hoard short-term gains, and coerces users to invest in more *sustainable* productive actions in the long run. (Demurrage currency devalues with time, so it spreads around faster, increasing in velocity, and hence, ironically, value.

barataria.org [barataria.org] used to have good info on the famous Worgl experiment, whose success caused the Austrian Central Bank to stomp it out. "The traders took no risk in accepting Wörgl scrip as it was completely backed by the national currency loan which the mayor had obtained from the savings bank and left on deposit there. This enabled anyone holding scrip to swap it at any time for 98% of its face value in national currency. Very few people appear to have made the exchange because at 2% it cost more to do so than to pay the 1% monthly re-validation fee, but any local money which was returned to the bank or paid to the council in taxation was immediately re-launched into circulation in the town."

IHMO, "money" is an elemental "code" that instructs most of our trades.. I look forward to new definitions and arrangements of it.. Redefined, it can promote cooperation over competition, and suit non-zero-sum increasing returns in network effects (ie free ideas grow more valuable as more people use them)

"Imagine how creative, how productive, how ecologically benign our businesses could be if we ran them according to the design principles of the rainforest. With thin soil, few nutrients, and almost no resources, rainforests could never qualify for a loan. Yet rainforests are more productive than any business in the world, home to millions of species of plants and animals, so perfectly mixed that they sustain one another and evolve into ever more complex forms." - Taichi Kiuchi [bionomics.org]

Re:No mystery (1)

jeorgen (84395) | more than 13 years ago | (#404727)

What about our real goals: happiness, peace, love, understanding, joy and their ilk? I propose we organize a system that only serves those goals.

So, then we have to get a committee to decide what these things, happiness, peace, love, understanding, joy and their ilk, are.

Then everybody can't agree. So we must find a way to make everybody agree, so we shoot those who disagree or place them to linger and die in labor camps. In this way by definition the society fulfils the goals of happiness, peace, love, understanding, joy and their ilk, because noone says it doesn't because those who would will be dead, detained or brainwashed. It is a common theme in communist thinking to point ot the bad things in a non-communist society and then hint at "we can, together, create a better one", not mentioning the actual methods waiting in the background. And the worse things get in the "new" society, it's allegedly because communism hasn't been properly or completely put in place of course.

/jeorgen

Re:E-gold is a great idea, but... (1)

e-gold (36755) | more than 13 years ago | (#404728)

Interesting thoughts. I frankly would not trust South Africa as much as I'd trust e-gold Ltd. (aside from being biased as hell because I get paid in the stuff) because governments are more likely than corporations to get into wars or enact unrealistic social programs than corporations are to violate contracts (and any currency is, in the end, simply a contract IMO) but having said that...

e-gold is kind of the older, more-secular branch of the e-metal family of currency. You see, it turns out that if one actually READS the Bible, the Torah, or the Koran, gold and silver get mentioned all the time in all these books. Well, some folks decided to take things seriously, so now we have e-dinar [e-dinar.com] . (It turns out the Prophet used gold and silver coins which were somewhat standardized by weight, and these folks are using the e-gold database and the old version of the system, with different terminology, to bring it back.)

These folks (thank God!) also started with minting coins, which brings me further from the bullion coin business (we like bars now, not coins, so it's advantageous to have folks selling bullion coins for e-metal as not everyone has 400 ounces to redeem). I've met them, and they're quite serious businessmen who have established ties with the governments of both Indonesia and the UAE (Dubai). There's more on their pages, and I even have some of the Dinar & Dirham coins.

All of this makes a pretty-good news story IMO (there's more, too [e-gold.com] ) but for the fact that we don't spend much of anything on advertising (I'm an exception) and instead rely on viral marketing (combined with hiring much-smarter nerds, our secret weapon). The news media are not too thrilled with our stinginess, I've gathered, but occasionally we're covered (albeit not in proportion to the quantity of business we do compared to the overhyped & in-the-red). I guess it's also strange for them to cover an ecommerce company that not only eschews hype, but also has the temerity not to locate in any of the "hot" (read: expensive and not-worth-it compared to central Florida) internet startup areas like the Bay area of San Francisco.
JMR

Heidi Wall is imaginary (1)

nycdewd (160297) | more than 13 years ago | (#404729)

pound sterling, the basic monetary unit of Great Britain, is divided (since 1971) decimally into 100 new pence. In a monetary sense, the term sterling was formerly used to describe the standard weight or quality of English coinage. The basic monetary unit of the United Kingdom is still called the pound sterling. The term is derived from the fact that, about 775, silver coins known as "sterlings" were issued in the Saxon kingdoms. A pound weight of silver was coined into 240 pennies,the weight of which was probably about equal to the later troy pound. Hence large payments came to be reckoned in "pounds of sterlings," a phrase later shortened to "pounds sterling." After the Norman Conquest the pound was divided for accounting purposes into 20 shillings and into 240 pennies, or pence. These pennies were made from an alloy that was 925 parts silver and 75 parts copper. This proportion remained the standard in English coinage until 1920, when the proportion of silver in the coinage was reduced to 500 parts per 1,000. Britain stopped using any silver in its coins in 1946, replacing it entirely with copper and nickel. By this time the value of silver had long ceased to have any direct link to the British currency, Britain having adopted the gold standard in 1821. In medieval Latin documents the words libra, solidus, and denarius were used to denote the pound, shilling, and penny, which gave rise to the use of the symbols £, s., and d. On Feb. 15, 1971, the pound sterling was officially decimalized into 100 new pence. The symbol £ was retained for the pound sterling; the letter p. was chosen for the new penny. Never was the pound sterling based upon the value of a pound weight of gold. It was based upon a gold standard, yes. I predict, with reasonable certainty, that Heidi Wall will not exist in 25 years, and unbridled capitalism will destroy the world as we know it.

Money will never go away (2)

SpinyNorman (33776) | more than 13 years ago | (#404730)

Money will always exist as an intermediatory for direct barter. The internet may add new forms of money such as Mojo Nation's "mojo" or PayPal's trust based $ equivalents (it's not a bank, so the system is based on trust in PayPal), but it will never do away with the fact that I may want bread today and not have the MP3 files that the bread-owner would like in exchange... so I give him the exchange medium money, which he can trade for MP3s tomorrow with someone else.

Re:Rather a USA-Centric world view, no ? (2)

SpinyNorman (33776) | more than 13 years ago | (#404731)

The US has high crime beause of its value system. People are more likely to feel justified in their violent acts because it serves their selfish needs (whatever they are) - and that is the #1 value in America: You are the only important thing to yourself ..

Interesting insight - I think you may be right.

dead wrong (1)

nycdewd (160297) | more than 13 years ago | (#404732)

Scandinavian nations are socialist, Canada is socialist... socialism is a necessary part of any viable capitalist democracy... socialism is likely as old as humanity, tribalism has strong aspects of socialism.

Re:Rather a USA-Centric world view, no ? (1)

alen (225700) | more than 13 years ago | (#404733)

And now most European countries are scaling back their social welfare systems.

1821 (1)

nycdewd (160297) | more than 13 years ago | (#404734)

Britain adopted the gold standard then... on May 5th, 1821

Re:pound sterling - silver (1)

e-gold (36755) | more than 13 years ago | (#404735)

For a good look at the contracts that made up older currencies, see the book Money [principiapub.com] , from Principia Publishing, Inc.

Whether or not you agree with the conclusions of the book, the definitions and photographs make it worth reading. It turns out the contract on US currency, for example, was quite a bit simpler and more honest back when you could trade paper for metal, and this honesty apparently was unpopular with the political class because you can't inflate gold as easily as you can inflate paper "tokens."
JMR

Re:Capital is imaginary. ha ha ha! (1)

pustulate (204444) | more than 13 years ago | (#404736)

I can't tell if the references in this article are intentionally wrong so as to mock the ideas, or accidentally wrong. Either way, it's hilarious!

Francis Fukuyama is a historian, not an economist. His book, The End of History, sees "History" as the struggle between competing systems of economic organization. History is at an end (according to him) because after the fall of the Soviet Union, the alternate ideology of economic organization essentially debased itself.

Money was never based on physical assets, it was a proxy for stores of value that were difficult to carry around.

"Now it is just valued for its intrinsic value to people." This make no sense, nor does the argument in the paragraph. Wow!

Fiduciary doesn't mean what it's used as in the reply. Fiduciary: A person holding a position of confidence, such as a trustee, guardian or executor. Capital has become a person!

new economy: what new economy?

This reminded me of the old living color skit, where the guy would be spouting words that he didn't understand. All in all, a great post! The poster is a genius, subtly mocking not only the lack of understanding and reasoning ability of slashdot readers, but mocking in a way that appears to understand the underlying arguments of economic theory. Bravo!

Re:No mystery (2)

SubtleNuance (184325) | more than 13 years ago | (#404737)

Capitalism is unsustainable
Remains to be seen.


I would assert that the end of Capitalism is Plutocracy, Monopoly and Fewer Rights for Citizens. These being natural responses to an uncontrolled market economy where the Entrenched Interests change the social landscape to assure their survival (and greater 'success').

America is manifesting these problems now. Massive Transnationals rule the government, Business Issues are the only discussions amoung your 'leaders', the RIAA/MPAA buy laws like the DMCA without anyone (population at large) having any idea how/why, Massive Transnationals set terms to the markets because of collusive business practices.

We've already tried...communism.
Communism has been attacked my McCarthy-inspired Americans. Make no mistake - the Powers That Be(TM) in America used every resource they had to destroy the former Soviet bloc - it did not 'fail' because of Communism, it didnt succeed because of the Actions/motives of Capitalist Yankees.

human population continues to grow *expontentially* Bzzzt. Population growth rates are declining. In fact some western countries have birth rates lower than the replacement rate, and are only maintaining their population through immigration
Western countries are not the only countries on the planet - Population is growing exponentially - and what the Sheeple in those countries are aspiring to is the same level of loathsome behaviour as 95% of American Sheeple. This is a problem. What will we do when everyone in the world tries to 'live' (consume) like Americans?

"Property Rights" are paradoxical, since the enjoyment of this right must deny this very same "right" to another.

True enough, except that the concept of 'Rights' itself implies that you have taken away something from another individual. For example, my right to life means that you do not have the right to kill me. Are you really proposing that indivduals should have no rights?


You might want to take a moment from defending your dogma to actually read his post.
non sequitur:

An inference or conclusion that does not follow from the premises or evidence.

A statement that does not follow logically from what preceded it.

Come back when you have a premise that is not filled with logical fallicies and factual error.

Re:Capital is imaginary. (2)

ttyRazor (20815) | more than 13 years ago | (#404738)

All social constructs are imaginary. It's the fact that everyone else shares the delusion that makes them worth something

Re:Capital is imaginary(gold has intrinsic value?) (1)

jerkface (177812) | more than 13 years ago | (#404739)

Once upon a time, money was based on physical assets. Now capital has become fiduciary - meaning it is not based on any physical assets at all. To explain, in the UK one Pound Sterling used to be one pound of gold by weight. Now it is just valued for its intrinsic value to people. If noone exchanges money fro gold, the intrinsic value of money is irrelevant. Everyone wants money, therefore money is valuable, QED.
Isn't it a little arbitrary for you to say that a piece of paper has no intrinsic value, but gold does? (yes I know gold has industrial and jewelry uses, but the vast majority of it sits in vaults and serves monetary functions). You are failing to realize why certain things become money in the first place.

Furthermore you are going on to draw conclusions from your lack of understanding about what/why money [ex.ac.uk] is what it is. I think that is why you say capital is not based on any physical assets - which is a total non sequitor, anyway. "Capital" is a short word for "the means of production." Capital goods are different from consumer goods [britannica.com] - you don't get capital goods to consume them, you get them to make you more productive at making other goods. Anything that helps you to produce things can be a capital good. So factory equipment are factory goods. To the extent that you use them to make things, your household tools can also possibly be considered capital. A farm tractor is also capital. You can begin to see how the lack of capital is something that separates the poor countries from the rich ones. A farmer who has to plow with a mule may work harder than his (say) american counterparts, but since american farmers have more capital (tractors as opposed to mules), they are able to produce more.

It is nonsense for you to say that "capital will be pure ideas" in 25 years. Many physical, real-world tasks - like producing food - will still need to be done, and capital equipment will be used to do them. I think you've just been confused by the abstract, intangible nature of financial tools - money, bonds, stocks - which are used to allocate and transfer capital.

The only truth to your comments - a truth I think you stumbled on accidentally - is that knowledge is a type of capital. There are plenty of abstract types of capital like this - for instance, reputational capital. These types of capital are intangible but they are incredibly important - knowledge is necessary to make other types of physical capital, for instance.

History isn't over (let's not abuse the meaning of Fukuyama's [francisfukuyama.com] words-that annoys him). Money will continue to exist. Physical forms of capital will continue to be important.

For great justice, before writing a couple of paragraphs about these topics you could at least take the time to learn the vocabulary first. I think you could benefit from reading some of DeSoto's books and articles.

Re:amazon reviews (2)

SpinyNorman (33776) | more than 13 years ago | (#404740)

Yeah, the /. review entirely glossed over the central thesis of the book which is that successful capitalism doesn't just allow for the accumulation of wealth, but that it also requires infrastructure/laws to allow that accumulated wealth to be mobile.

I've always thought it pretty obvious that the US's prosperity comes from two things:

1) Wealth generation by a continual influs of highly motivated immigrants

2) Wealth spreading by a society that prefers to borrow and spend rather than save

It's funny how so many people think the national debt is a bad thing, when withing reason (e.g. the runup during Reagan's years rather than that of Bush Sr.), it's part of the system that has been so successful.

Re:Capital is imaginary. (1)

Dervak (94063) | more than 13 years ago | (#404741)

In 25 years, the goverment have given all citizens a nano-assember, that can make bread.

Not very likely. Because M$-AOL-TimeWarner-GM-Exxon-Sony-Matsushita will own the "IP" and patents for all kinds of bread and milk. Noone will be allowed to use their nanoassembler (if they are allowed to have one) for that, at least not without paying a fee every time you use it (which, coincidentally will be about three times the price of bread and milk today). Ah - the joys of monopoly!!!

At least this is likely to happen if we do not rise up and destroy our corporate lords while we still can, while they still do not control everything.

/Dervak

Re:Capitalism is necessary, but not sufficient (1)

jerkface (177812) | more than 13 years ago | (#404742)

Another even better example is Hong Kong, which was not democratic under British rule because the residents of Hong Kong didn't get to vote for their leaders. Also, unlike Singapore, Hong Kong doesn't have so many anal-retentive/conservative laws banning things like oral sex and chewing gum in public. And finally, Hong Kong is more capitalistic in the sense that the government involves itself in the economy less.

Re:Rather a USA-Centric world view, no ? (1)

spanky555 (148893) | more than 13 years ago | (#404743)

Uh, I put a lot of stock in science. However, there are scientists that also refute that global warming is occurring, or even that people have more than negligible affect on it even if it is happening. Ie, when a volcano blows its top, it puts out a lot of harmful things, and in some cases, can effectively blot out for large areas...not to mention the damage the ash itself can do. Maybe what we need to do is regulate volcanoes.

How short our collective memory is - wasn't it just 25-30 years ago that we were told that the Earth is cooling off, and we could be entering another Ice Age?

Regarding your facts about U.S. polluting more per capita, is the "per capita" relevant here? In any case, look at the kind of pollution that occurs in Mexico, India, Russia and China, and tell me again that Americans are the worst offenders. There are some absolutely horrible things going on there.

So, America is not a stable country? When's the last time we had a war on our soil? And when did Europe last have war on a majority of its soil? Again, those short collective memories. You do agree that war ranks fairly high on the UNstability chart, do you not?

I do agree with you about the large cars, though - I f***ing HATE SUV's. They are the most idiotic trend to come along in years.

I strongly DISAGREE about your statement about Europe being 50-100 years ahead of the US in the "ethical evolution" of mankind. Ethics is a very slippery subject, and it's really hard to claim that one set of ethics is more "evolved"
than another. Much of Europe seems to believe that redistribution of the wealth is a good thing, and that is something that sticks in the craw of the U.S. For those that like Europe's system (socialism), I suggest you move there, you're not wanted here, esp. if you are trying to effect a change here in the direction of socialism.

Re:Rather a USA-Centric world view, no ? (3)

SubtleNuance (184325) | more than 13 years ago | (#404744)

America spends more on its miltary than any other country in the world. What exactly does this contribute to free trade ?

You're joking, right? How about, for one, the free-flow of oil at market prices? Or do you forget that Saddam dude who tried to take over a large majority of the world's oil supply? If the US hadn't stepped up, you would have a king of the "United Kingdom of the Middle East" by now. Stable economies require a stable world. A strong military is critical to stable economies.


The fact that you feel the 'free flow of oil' or 'stable economies' are reasons to FUKCING KILL PEOPLE is exactly why you are disqualified from this conversation. Twit.

The problem is that Americans like big cars, and the rest of the world doesn't

The problem is that ONLY Americans would kill people so they can drive big cars that needlessly burn gas. The fact that you support a Plutocratic Government to use its Military to subsidize oil prices so you can drive a big car is amazing. When violence breaks out in other places; sane, stable and wise people are concerned for the citizens of the region, and are hopefull to participate in peace. Only Americans see Market opportunities and 'stable economies' as concern in these cases.

great rebuttal (2)

Preposterous Coward (211739) | more than 13 years ago | (#404745)

I was going to say all these things, but not only did you beat me to it, you did it better than I would've. I can't help but adding a couple of supporting points:

Thomas Malthus made the exponential-population argument more than two centuries ago. Paul Ehrlich did it again in 1969, claiming in his best-seller The Population Bomb that "We have already lost the battle. No matter what crash programs are instigated at this time, they will not be enough to prevent a worldwide famine of catastrophic proportions in the next ten years. Billions of people will die." Whoops. (Here [redherring.com] is some information on the late Julian Simon, who repeatedly and famously debunked such bogosity.)

Capitalism encourages unsustainable population growth, depletion of natural resources, and the creation of waste products.

Aside from the fact that it's not clear that human population growth is indeed "unsustainable", you could replace "capitalism" with many words, including "life" itself, that would result in equally true statements. Rabbits, rats, and cockroaches, for example, do not practice capitalism (that I know of :-), yet they practice unsustainable population growth (to the extent permitted by the lack of predators), depletion of natural resources (food, oxygen, etc.), and the creation of waste products (turds, CO2, etc.). The same is true even of lowly bacteria, except that their "natural resources" and "waste products" are rather different than ours -- which merely serves demonstrates that one lifeform's "waste products" are another's "natural resources".

Incidentally, I could easily argue that lack of capitalism promotes slavery. The absence of property rights essentially means that others can usurp the fruits of your labors whether you like it or not. It's less direct than literally buying and selling human beings, of course, but it's not at all dissimilar in principle.

Re:No mystery (2)

SubtleNuance (184325) | more than 13 years ago | (#404746)

Then everybody can't agree. So we must find a way to make everybody agree, so we shoot those who disagree or place them to linger and die in labor camps

Where the hell did that come from? Why would I care what you are proposing to do to make yourself happy? I wouldnt give a damn. Your rights to seek happiness ends when it interferes with the commons. When you pollute or exploit this is wrong. I would suggest you dont have the right to do that in pursuit of your happiness. When you subvert the purposes of capitalism to control markets/people/other business. I would suggest you dont have the right to do that in pursuit of your happiness.

Its the idea that *YOUR* rights are more important than the rights of the community is what I would be against. Im finding that this concept is what is lacking in the USA - im really thinking this is the fundamental problem. Americans care nothing of others - its a engrained character flaw (and encouraged by your Corporate Government because it serves them) - you simply cannot see the 'other arguments' because you are conditioned to only care for yourself.

A success in western ? where ? (1)

SocialEcologist (319414) | more than 13 years ago | (#404747)

Hello all, i agree and enjoy the answer of Lord Hugh Toppingham. But i just wonder : where is the success in america ?
  1. the environment is more and more destoryed everyday. Americas natural ressources are constantly beeing stolen and privatized. Why do you think the 'll sign the Free Trade agreement in April : they want infinite access to the pan-american ressources !
    Cause their own are emptying...
  2. Capitalism did lead to poverty and still do. 14 millions people live under poverty line in USA according to UNO.
    Is that a succeed benchmark ?
  3. Capitalism has destroyed democraty to take the power and give it to corporation . There is no free press, no free information, no right to workers, school, home, all is invested by capitalism.
    The democraty is falling.
    USSR was a one-party dictature, USA is a two-party dictature. Democraty is just a comestic !
    Do you really think the last us election wasn't a putsch of Big Business ?
  4. I think Chomsky's analysis is clever : capitalism is way to continue the economic conquest , there is the same kind of violence in globalization of 21st century and colonisation of 19-20th century.
    1. Did you vote for the AFTA/ALCA/ZLEA ?

what are you saying? (1)

Preposterous Coward (211739) | more than 13 years ago | (#404748)

Southern California is an example of this. Xenophobia and prejudice are easy to develop under these conditions because in a democratic society, those moving in want things their way, similiar to what they are comfortable with, the way they knew it in their former homelands.

I place the blame for xenophobia and prejudice squarely on the ones exhibiting it, not on people who want to immigrate and retain portions of their original culture. (Incidentally, I lived sourthern California for 17 years, so I'm not at all unfamiliar with this. I knew lots of people who believed there should be English-only laws, but I figure that if people want to conduct their business in Spanish or Vietnamese or Chinese, what moral authority do I have to disallow that?) Now, if people want to maintain their individual culture to such an exclusive extent that they are unwilling to interact with the people who lived there before, they're guilty of the same intolerance, but I tend to believe that's the exception rather than the rule.

I once read an interesting piece once about the origin of the so-called Chinatown districts in many U.S. cities. Turns out that one of the favorite entrepreneurial activities of early Chinese immigrants to the U.S. was laundries, so city councils passed ordinances limiting where laundries were permitted, thus effectively segregating the immigrants without doing anything overtly prejudicial. In other words, the xenophobia was imposed from the outside, not the other way around. I find this particularly ironic given that the U.S. is a country of immigrants in the first place -- it's not as if we have thousands of years of history and a political system built to defend that historical culture.

Re:Rather a USA-Centric world view, no ? (1)

spanky555 (148893) | more than 13 years ago | (#404749)

1. Ah. The ad hominem attack. A favorite of liberals everywhere.

2. And your italicized and bolded text implies that you'd like to scream your remarks.

Both of which would put you up for disqualification from a rational discussion.

Thanks for playing.

Maybe now you can call me a twit, too.

What is capital? (2)

Eric Green (627) | more than 13 years ago | (#404750)

"Capital" is the goods and services produced by an economy. "money" is something issued by government (usually) that people use as an easy "short-cut" for exchanging goods and services. Money has no inherent value of its own, as can be noted by the experiences of the Weirmer Republic and Yeltsin's Russia, where the mark and the ruble (respectively) became worthless toilet paper due to being overprinted by the government, and thus people moved to other methods of exchange (barter, mostly). Money's only value is in how many goods and services it represents.

All economies have capital. Capital is what we eat, is where we sleep, is what we wear. Even communist societies have capital. They merely assign ownership of that capital to the State. Even socialist societies have capital. They merely use the government to reassign ownership of some of that capital based upon various principles of fairness or equity.

"Capitalism", as you use the term, is a misleading abbreviation of the term "free-market capitalism", which is where ownership of capital is vested in individuals and these individuals vie to increase the amount of capital that each of them owns. This has proven to be very effective at increasing the amount of capital in a society. There are costs to "pure" free market capitalism, though. In the short term, "pure" free market capitalism would have business owners creating unsafe workplaces and polluting the environment, because in the short term those result in more profit, for example. And there are always winners and losers in free market capitalism, and the question of what to do with the losers (those whose skills and abilities do not have value enough to provide them with food and shelter) remains. Thus Carl Marx's criticism of the free market capitalism of his day was quite on target. Thankfully, we do not live in a "pure" free market economy today, but, rather, one which is moderated by government. The extent to which a government should intervene in a free market economy is always an issue, but even the most die-hard free market capitalists admit that the economy would collapse if not for government interventions such as, e.g., chartered limited-liability corporations (a government-enforced invention, otherwise shareholders would be liable for the misdeeds of corporations and would not invest money in corporations), court systems (which allow settling business disputes without guns, well, usually, anyhow), and guarantees of the safety of the money supply.

-E

Re:Why not everywhere, then? (2)

YU Nicks NE Way (129084) | more than 13 years ago | (#404751)

How do you know that capitalism isn't actually either ascendent or in ascent everywhere? How are you measuring it's status among the evolving economies outside the developed world?

One of the consequences of Da Soto's analysis is that "capitalism" is undermeasured in those economies. The shadow economy is rabidly competitive and fiercely price driven -- a very classical capitalistic system. If, as Da Soto argues, the shadow economy is not counted in your market analysis, you'd see only the failure of the grand projects, but miss the success of the petite (in this case, tres petite) bourgeoisie.

Re:Rather a USA-Centric world view, no ? (2)

Reality Master 101 (179095) | more than 13 years ago | (#404752)

The fact that you feel the 'free flow of oil' or 'stable economies' are reasons to FUKCING KILL PEOPLE is exactly why you are disqualified from this conversation.

I forget who said it, but I think the quote is relevent here: "Without economic freedom, all other freedoms are just an intellectual excercise."

We didn't just "kill people", we killed military soldiers invading another sovereign country, which happened to correspond to one of our vital national interests. You'll also notice that Kuwait and Saudi Arabia (who was next) asked for our help.

And before you get on a "so, you only defend countries where you have an economic interest" kick, you are damn straight right. The US is not the world's policeman, but we are going to step in when it's in our best interests to do so.

The problem is that ONLY Americans would kill people so they can drive big cars that needlessly burn gas.

There is absolutely no reason to go back to living in caves, which is the ultimate conclusion to that line of thinking. Big cars / small cars? Hell! Let's do away with cars; that's much more efficient. And then, let's restrict travel because you know that are rarely reasons for such "inefficiency". Ad infinitum. Don't believe it can happen? Please look at the Soviet Union who tried this type of thinking.

Restricting freedom is never the answer. In fact, got news for you: today's large cars pollute far less than yesterday's eurocrap cars. The answer to technology's problems is more technology, not conservation.


--

Who says that it is not? (2)

Eric Green (627) | more than 13 years ago | (#404753)

I don't know of any country (other than perhaps North Korea and Cuba) where free market capitalism is not the primary producer of wealth. So why are you saying that it's NOT ascendant everywhere?

There are countries where free market capitalism is not very efficient because either they have no effective government (Russia, Somalia), or because their government is corrupt (Kenya) or because their government is incompetent (Peru). Still, the majority of wealth in those countries is created by entrepeneurs practicing free market capitalism -- creating goods and/or services and selling them on a free market. This is difficult in countries that lack a stable money supply (Russia) or government support for private property (China), but it's interesting to note that China has no food shortages because private farmers produce more food than all collectives combined, despite controlling a quite small percentage of the land.

Remember, "capitalism" is not stock markets and such. It is the trading of goods and services in a free market, rather than the forced redistribution of goods and services by a government entity. Wherever there is a village market, there is capitalism.

-E

So many errors, so little time (2)

Ars-Fartsica (166957) | more than 13 years ago | (#404754)

1) America has the largest tax receipts of any country in the world. Hardly a Capitalist utopia.

The United States has considerably lower tax rates than most European countries. As to how this creates larger tax revenues, investigate the Laffer Curve.

2) America spends more on its miltary than any other country in the world. What exactly does this contribute to free trade ?

What do military expenditures have to do with free trade??

3) American corporations are amongst some of the most monopalistic in the world. Is this the free market ?

Yes, it is. It is not illegal to hold persuasive market power in any industrialized nation, as long as legal means were used to obtain market power. At least the government doesn't force citizens to prop up big industry, like in Europe [airbus.com] .

4) When forced to compete on a level playing field, US corporations fail dismally. E.g. the auto industry. You will not see ANYONE driving an Amercian car in Europe. Like most Amreicans, we would prefer a quality vehicle from BMW, Mercedez-Benz, Volkswagen, Seat, Skoda, Porshe, or even a Japanese made vehichle rather than the American low quality product.

Ha! You moron! Volvo and Saab and Jaguar are owned by American companies. Do some research! How many English automakers are still owned by the English?

5) Exploitation of resources and inefficiency. America leads the world in the destruction of the natural environment.

Wrong. China and even Canada are, on a per capita basis, more wasteful of resources.

Re:Rather a USA-Centric world view, no ? (1)

Preposterous Coward (211739) | more than 13 years ago | (#404755)

First you state "Americans like big cars" then "American [sic] is one of the cleanest countries in the world". Cars are one of the major sources of pollution, about 25% of total.

Uh, maybe 25% of the total NOx emissions or something like that, but hardly 25% of *total* pollutants economy-wide.

Also, even though American cars are big, newish American cars are very, very clean-running. Try visiting someplace like Rome or Athens, both of which are beautiful cities with great historical significance that are just appallingly, unbelievably polluted. (I grew up in L.A. in the 70s and 80s, and lived through plenty of serious smog alerts... and they are *nothing* compared to everyday air pollution in some cities I've traveled to. And I have yet to make it to Asia...)

Sure, gas prices in the U.S. are too low and don't take into account the real costs of hydocarbon fuels. But because driving is so central to people's living and working arrangements in the U.S. -- much more so than virtually anyplace I've ever visited -- that's unlikely to ever change.

Ugh! More drivel. Please read. (2)

Ars-Fartsica (166957) | more than 13 years ago | (#404756)

First you state "Americans like big cars" then "American [sic] is one of the cleanest countries in the world". Cars are one of the major sources of pollution, about 25% of total. Big cars use more fuel, need more material, bigger roads, etc. They pollute more by any standard.

This is a ridiculous generalization. How about nations that still use leaded fuel, like China? Leaded fuel is far more polluting that unleaded fuels used in industrialized nations.

As it stands, every environmental account will display quite clearly how air quality in the US has risen dramatically in the last twenty years with the advent of cleaner fuels - even cities like Los Angeles are dramatically less smoggy.

I'd say europe in general is 50-100 years ahead of the US in the ethical evolution of mankind.

Ha! What a crock of shit! Lets recount the burning of immigrant homes in Germany, or how about the inability of the major European powers to do a damn thing about the Balkan conflict? Time and time again Europeans have looked to the US to handle major humanitarian efforts. Europeans are inward looking protectionists who are more regularly xenophobic than any culture perhaps save the Japanese.

Protestant thought instrumental (3)

ColMstrd (103170) | more than 13 years ago | (#404757)

Max Weber--the father of sociology--attributed the inception of capitalism to the protestant need to do good works on earth for reward in heaven, this being a change from the Roman Catholic cycle of sin, absolution, redemption etc.

His book The protestant ethic and the spirit of capitalism [virginia.edu] traces the historical antecedents very clearly. Check out Chapter 2 [virginia.edu] (54k) in particular for an exposition of how maximising business profit became a devout obligation.

Ironically, now we anticipate the Flood (global warming) that is the direct consequence of this sequence of thoughts and behaviours.

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