[paulsecwhatt]

A large number (majority?) of people who are proponents for american-style capitalism, advocating for less government intervention, are from big universities around the U.S, and will often earn a relatively high wage. Although it's very hard to quantify, I feel as though these people are very disassociated from the everyday life the claim to be studying. If you live near Harvard earning ~300k a year, how easy is it to imagine (pretend?) that everything is fine and that the skewed income distribution is actually a positive thing. Boiled down - can people who are part of such a skewed system really produce unbiased studies and theories about the system?

They back up their claims with various arguments as to the nature of the average consumer and echoes and remnants of trickle-down economics theories.

Why don't people instead look at the actual world for more accurate evidence? The U.S. is a pioneer of creating highly divided cultures, with the top 1% earning ridiculous amounts of money and living in relative luxury, while having a very large population of people struggling to make ends meet, or even get healthcare due to the associated costs.

At the same time, countries exercising a highly socialistic economic policy (welfare countries), such as the Nordics and Germany to some extent have a far higher "average" quality of life, as well as (arguably) a happier population. Being a taxi driver in Norway or Denmark doesn't mean you live in near-poverty and have to work 80 hours a week to make ends meet.

While I'll try to not get into details of economic theory, and so forth, one question that has always irked me is the following:

Does the evidence not speak for itself? In what country has pure capitalism (or at least as close as we can get), actually worked to produce a happy and harmonious society?

[msandford]

Personally I think that the growth of the banking sector is the problem, as it tends to capture more and more of the profits and allocate them to the pay of the bankers. It's also a brain-drain on other industries. Finally, the banks do occasionally lose everything and then we have to bail them out.

Remove the "bail them out" part of the process and you'd likely see a fair amount of income equality restored. Banking has a concentrating effect on the economy, and the bigger the bank the more concentrating it is.

If we had banks small enough to fail, they'd still concentrate but to a much smaller degree. That'd be good for income equality and good for putting smart people to work in favor of small businesses instead of against them, and good for reducing the tax burden on the non-rich who ultimately fund the bailouts.

[walterbell]

We know when the firewall was turned off:

https://en.wikipedia.org/wiki/Glass–Steagall_Legislation

https://en.wikipedia.org/wiki/Gramm–Leach–Bliley_Act

[msandford]

I'm not sure that repealing Glass-Steagall was the problem. We did have the savings & loan crisis and that was prior to the repeal.

Personally I think it has more to do with the banks going public and then being on the treadmill of ever increasing profits. The NYT has a piece on the issue from 1999.

http://query.nytimes.com/gst/fullpage.html?res=9C03E7DF1639F...

Slate also documents the banks going public, again prior to repealing Glass-Steagall.

http://www.slate.com/articles/business/moneybox/2010/01/the_...

[tunap]

Consolidation of oligops, helped too, corporate welfare has always been the norm & the revolving door b/t industry & regulators is a new-ish trick they seem to have mastered to a T. The Commodities Modernization Act of 1999+Financial Services Commodities Act of 1999 were not the bills that killed Glass-Steagall, but they were the final stake in the heart of the GD I protections that have been eroded over the last 30 years, or so. Frontline had a great doc'y on it years ago documenting the billions of lobbyist dollars that went into the piecemeal dismantling the G-S Act, but I cannot locate it currently(my n900 is almost just a phone these days...which is nice). Now that we are entrenched in the GD II, aka the 'Great Recovery', we can use some of our idle time to look back at commodities and securities price graphs over the last 20-30 years. It may be a coincidence that prices tripled, quadrupled & quintupled since 2000, but I doubt it. It took them 7 years to ruin the world economy and it would have come quicker if 9/11 hadn't made them pause to shed some crocodile tears.

PS: hey Walter, to answer your questions from last month I can no longer post to: Yes & Mostly abstinence. More I rely on an org, the more I am beholden to them. Stick mostly to bare essentials.

[walterbell]

The world is going to need a "minimal tech" community to share best practices :)

[fixxer]

"Boiled down - can people who are part of such a skewed system really produce unbiased studies and theories about the system?"

Those who are part of the 99% exhibit a bias as well. This is the nature of political economy arguments.

[kabouseng]

Wow lots of strawmen here.

"A large number (majority?) of people who are proponents for american-style capitalism, advocating for less government intervention, are from big universities around the U.S"

Source? So what?

"Boiled down - can people who are part of such a skewed system really produce unbiased studies and theories about the system?"

Can people who are part of the lower earning rung of society give a unbiased opinion of the system?

"Does the evidence not speak for itself? In what country has pure capitalism (or at least as close as we can get), actually worked to produce a happy and harmonious society?"

Yes the evidence does speak for itself. Capitalism worked out pretty great for much of Western Civilization. Everywhere where more socialist approaches were tried it failed. Just ask all soviet countries', Japan, East Germany, China etc. citizens if they are happy.

America is not for nothing the land of opportunity, and it is not for nothing that emigrants are flocking to the USA, Europe and Australia.

Unfortunately the soviets discovered you cannot have a classless society. It is that drive to elevate yourself to a higher class that makes us want to achieve more than the absolute minimum required effort.

[tveita]

> America is not for nothing the land of opportunity

The U.S. has low social mobility compared to other developed countries. What claim does it currently have on being the land of opportunity?

[johanneskanybal]

Creative quoting on your part but let's not pretend he was talking about communism. It stated pretty clearly [countries with] "highly socialistic economic policy (welfare countries)". All the mentioned countries are successfull capitalistic countries with better safeguards and policies.

[kaybe]

Well, in Germany we call the system we're using 'social market economy' and it does not aspire to be pure capitalism.

[paulsecwhatt]

"Source? So what?"

Apologies for that intro, I had planned to delete it but I'll leave it so your comment makes sense. I was planning to expand a thought about how it's always the rich who casually conclude that lower taxes and less welfare will help the economy.

"Can people who are part of the lower earning rung of society give a unbiased opinion of the system?"

In a democracy, yes, they do. Someone who is lower down on the earning rung of society (say earning the median US income), has a far more accurate view of the "average" society than someone who is at the very top, merely because they represent an average citizen.

"Yes the evidence does speak for itself. Capitalism worked out pretty great for much of Western Civilization. Everywhere where more socialist approaches were tried it failed. Just ask all soviet countries', Japan, East Germany, China etc. citizens if they are happy."

East Germany no longer exists and Russia is essentially a dictatorship with a very powerful upper class of plutocrats, not unlike the US. The happiest countries in the world are Switzerland, Iceland, Denmark, Norway and Canada according to the World Happiness index. Do you notice a trend among those countries?

"America is not for nothing the land of opportunity, and it is not for nothing that emigrants are flocking to the USA, Europe and Australia."

Denmark has twice the social mobility of "the land of opportunity" as defined by the probability of someone born in the poorest 25% of society making his/her way up to the richest 25% of society within their lifetime. I don't think America is the land of opportunity, unless you count the children of the rich who were shuttled into Ivy Leagues as those with opportunity.

"Unfortunately the soviets discovered you cannot have a classless society. It is that drive to elevate yourself to a higher class that makes us want to achieve more than the absolute minimum required effort."

I do not disagree, it is impossible to have a completely classless society. But that does not mean that the lowest class cannot have a decent quality of life and financial security. I think it begins with education. After all, only 5.7% of the US population has an education above high-school level. (obviously skewed by <18s, but still a shocking number)

[kabouseng]

I must apologize as well, starting with saying it's straw men is just a tad too passive aggressive.

We are if nothing else viewing the world through the glasses of our own experiences, and as such I must ask that you take my comment as such as such (I'll explain in just a second). There may yet be a better system than naked capitalism, but from experience socialism / welfare states can be a slippery slope, where the masses vote for ever increasing entitlements that does little to alleviate their circumstances.

The countries you have mentioned are indeed the epitomes of good governance and social responsibilty, but they have one other very important characteristic going for them. They are mostly homogeneous. I don't think the USA can say that of themselves anymore and from experience that complicates things quite a bit.

My rose tinted glasses :) . I am from South Africa, another non-homogeneous society with deep scars where we have slowly seen the expenditure of social grants (state welfare) creep up with very little to show for it [1], up to the point where the entire economy is risking collapse [2], not so much because of the expenditure of social grants per se, but because the society here have adopted an attitude of entitlement and looting [3].

So I guess my point is (and was poorly made), be very careful of the law of unintended consequences.

>>"I think it begins with education."

Maybe, who knows. I personally don't believe that anymore.

>>"merely because they represent an average citizen."

I think as in most discussions, balance between viewpoints is what must be sought. Certainly the average citizen must have at least some forms of state provided protection from the rich and powerful and poverty safety nets. But I have also seen the opposite where the poor votes for larger and larger royalties for themselves until the most industrious of society simply packs up and leaves, not willing to part with their earnings with no compensation in return. (Again my rose tinted glasses, in South Africa 2 million tax payers pay 80% of all taxes, and supports 18 million social grant receivers and 2 million salaried government workers. That is not a sustainable situation).

[1] http://www.bdlive.co.za/national/2013/10/02/growth-in-social...

[2] http://www.bdlive.co.za/national/2013/06/28/south-africa-fac...

[3] http://www.dailymaverick.co.za/article/2014-01-20-analysis-a...