One Problem with Capitalism?

[Amechania]

But it still pays to have software techniques to catch embezzling.
I know....boy, oh boy do I know!

I just count cups. No one has ever embezzeled from me so far as I know. I don't have that many employees and they're mostly seasonal workers. I usually hire college kids. My associate is the one who keeps me from dipping into the till. If I didn't have her I'd be up a creek.

 

[Revoltingest]

I just count cups. No one has ever embezzeled from me so far as I know. I don't have that many employees and they're mostly seasonal workers. I usually hire college kids. My associate is the one who keeps me from dipping into the till. If I didn't have her I'd be up a creek.

One case: I hired a low skill gal, trained her, & paid above market wages & bennies. She did reception, & was quickly promoted to a facility manager, which included accepting payments from customers. I developed a technique of seeing if a tenant's activity didn't match the general ledger. Lo & behold, I immediately spotted that someone was pocketing the cash. Treating people well is no guarantee of loyalty or honesty.

 

[Amechania]

One case: I hired a low skill gal, trained her, & paid above market wages & bennies. She did reception, & was quickly promoted to a facility manager, which included accepting payments from customers. I developed a technique of seeing if a tenant's activity didn't match the general ledger. Lo & behold, I immediately spotted that someone was pocketing the cash. Treating people well is no guarantee of loyalty or honesty.

That is certainly true, there are no guarantees. Hence background checks. I think treating people well is better than treating them badly, if for no other reason than to alleviate any guilt you might feel if you have to fire them. I'm sorry you had that experience.

 

[work in progress]

I argue that your problem should be with gov policy rather than capitalism itself.
Consider:
- Only government creates new money. And they do so at a rate which devalues the currency.

Wrong! The so called money multiplier effect in itself, tells us that banks create new money through commercial loans:

It has been called "the most astounding piece of sleight of hand ever invented." The creation of money has been privatized, usurped from Congress by a private banking cartel. Most people think money is issued by fiat by the government, but that is not the case. Except for coins, which compose only about one one-thousandth of the total U.S. money supply, all of our money is now created by banks. Federal Reserve Notes (dollar bills) are issued by the Federal Reserve, a private banking corporation, and lent to the government.1 Moreover, Federal Reserve Notes and coins together compose less than 3 percent of the money supply. The other 97 percent is created by commercial banks as loans.2
​

Web of Debt - Dollar Deception: How Banks Secretly Create Money

And this fact has been recognized by the bankers for at least the last 100 years:

From time to time, however, the curtain has been lifted long enough for us to see behind it. A number of reputable authorities have attested to what is going on, including Sir Josiah Stamp, president of the Bank of England and the second richest man in Britain in the 1920s. He declared in an address at the University of Texas in 1927:
​

The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in inequity and born in sin . . . . Bankers own the earth. Take it away from them but leave them the power to create money, and, with a flick of a pen, they will create enough money to buy it back again. . . . Take this great power away from them and all great fortunes like mine will disappear, for then this would be a better and happier world to live in. . . . But, if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit.
​

Web of Debt - Dollar Deception: How Banks Secretly Create Money

- Continually devalued currency spurs speculation & hurts savings.

And so does capitalist economies reaching the natural limits of real economic growth. Declining available land and resources... especially the decline in conventional oil in particular, has become a governor on the economic growth engine...as oil prices shoot up every time growth resumes.

The lack of real economic growth has often been cited as the no.1 reason why the financial high rollers started betting and taking bets on existing investments...otherwise known as derivatives markets.

- Only government can forcibly curb population growth.

If we use Japan as an example: a nation that was becoming dangerously overcrowded twice since the 1700's, was able to end growth and reduce population through non-coercive means. Humans are more complicated than animals who act solely on instinct. As long as the coercive forces that run society (religion or government) retreat from their demands to procreate, the costs and difficulties of supporting larger families will be enough incentive to promote smaller family size.

- Environmental destruction is directly caused by an expanding population, not by capitalism.

Wrong. The most dangerous environmental threat this world faces today is rising carbon levels in the atmosphere. Rising CO2 (now over 400ppm) has caused the greenhouse effects and ocean acidification which caused most of the extinctions in the past - Alarming new study makes today’s climate change more comparable to Earth’s worst mass extinction.

Even socialists & communists require land to grow food, so if we have more of them, then we will have less wild space on the planet.

I believe some form of socialism - which directs industrial production towards essential products, rather than flimsy, disposable consumer junk that adds to landfills and plastics/chemical residues in the oceans, will be the better option for the future. The present system of the past several decades....consumer demand...driven by mind-warping marketing strategies to create neurotic, impulsive consumers, is why we are producing our way to extinction today.

I don't have a solution to the problems you see, but it's important to complain about the correct causes.

Exactly.

 

[Revoltingest]

Wrong! The so called money multiplier effect in itself, tells us that banks create new money through commercial loans:

It has been called "the most astounding piece of sleight of hand ever invented." The creation of money has been privatized, usurped from Congress by a private banking cartel. Most people think money is issued by fiat by the government, but that is not the case. Except for coins, which compose only about one one-thousandth of the total U.S. money supply, all of our money is now created by banks. Federal Reserve Notes (dollar bills) are issued by the Federal Reserve, a private banking corporation, and lent to the government.1 Moreover, Federal Reserve Notes and coins together compose less than 3 percent of the money supply. The other 97 percent is created by commercial banks as loans.2
​

Web of Debt - Dollar Deception: How Banks Secretly Create Money

And this fact has been recognized by the bankers for at least the last 100 years:

From time to time, however, the curtain has been lifted long enough for us to see behind it. A number of reputable authorities have attested to what is going on, including Sir Josiah Stamp, president of the Bank of England and the second richest man in Britain in the 1920s. He declared in an address at the University of Texas in 1927:
​

The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in inequity and born in sin . . . . Bankers own the earth. Take it away from them but leave them the power to create money, and, with a flick of a pen, they will create enough money to buy it back again. . . . Take this great power away from them and all great fortunes like mine will disappear, for then this would be a better and happier world to live in. . . . But, if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit.
​

Web of Debt - Dollar Deception: How Banks Secretly Create Money


And so does capitalist economies reaching the natural limits of real economic growth. Declining available land and resources... especially the decline in conventional oil in particular, has become a governor on the economic growth engine...as oil prices shoot up every time growth resumes.

The lack of real economic growth has often been cited as the no.1 reason why the financial high rollers started betting and taking bets on existing investments...otherwise known as derivatives markets.

If we use Japan as an example: a nation that was becoming dangerously overcrowded twice since the 1700's, was able to end growth and reduce population through non-coercive means. Humans are more complicated than animals who act solely on instinct. As long as the coercive forces that run society (religion or government) retreat from their demands to procreate, the costs and difficulties of supporting larger families will be enough incentive to promote smaller family size.

Geeze Louise...where to start...where to start.
More than one things is called "money" these days, including some things which function as money but aren't. Only the fed creates money, but things which function as money can be created in the private sector. But if you go to a bank to get a home loan, you get money created by the fed. And they do it using their creation, the central bank. Ordinary "real" banks cannot create money out of thin air the way the fed can. (Physical money is created only by the Treasury Dept.)
http://en.wikipedia.org/wiki/Fractional_reserve_banking

Wrong. The most dangerous environmental threat this world faces today is rising carbon levels in the atmosphere. Rising CO2 (now over 400ppm) has caused the greenhouse effects and ocean acidification which caused most of the extinctions in the past - Alarming new study makes today’s climate change more comparable to Earth’s worst mass extinction.

Your argument doesn't even support your claim about capitalism.

I believe some form of socialism - which directs industrial production towards essential products, rather than flimsy, disposable consumer junk that adds to landfills and plastics/chemical residues in the oceans, will be the better option for the future. The present system of the past several decades....consumer demand...driven by mind-warping marketing strategies to create neurotic, impulsive consumers, is why we are producing our way to extinction today.

This worked so well in the old USSR & PRC, where they still had shoddy consumer goods, but just far fewer of them.

 

[Saint Frankenstein]

Isn't this at odds with anarcho-communism, since the left is big on a much more powerful central government?

Um, no. That's not a good description of leftism. Anarcho-communism is a form of far-leftism. Of course, it's anti-statist. But, while we have a state, I'd rather have a state that that at least pretends to care about its citizens by having strong social welfare programs.

 

[Revoltingest]

Um, no. That's not a good description of leftism. Anarcho-communism is a form of far-leftism. Of course, it's anti-statist. But, while we have a state, I'd rather have a state that that at least pretends to care about its citizens by having strong social welfare programs.

The definition of "left" just got murkier. The most anti-statist (another definition
quagmire) group out there is us Libertarians, but you wouldn't vote for us, would you?

 

[Saint Frankenstein]

The definition of "left" just got murkier. The most anti-statist (another definition
quagmire) group out their is us Libertarians, but you wouldn't vote for us, would you?

Leftism can be statist or not, same for rightism. Libertarians are not anti-statist, you just support having a very weak federal government. The major difference between leftism and rightism is egalitarianism. All right-wing ideologies support some sort of social hierarchy, even if they have nothing else in common. Leftist ideologies want to either ease or completely do away with social/political/economic hierarchies.

 

[Revoltingest]

Leftism can be statist or not, same for rightism. Libertarians are not anti-statist, you just support having a very weak federal government.

To be anti-statist is more of a direction in which a party would steer government.
If "anti-statism" meant no government at all, then I see no one who would qualify.

 

[Saint Frankenstein]

To be anti-statist is more of a direction in which a party would steer government.
If "anti-statism" meant no government at all, then I see no one who would qualify.

Ah. Well, that makes more sense when you put it that way.

 

[Desert Snake]

I'm capitalist by default.

 

[The Sum of Awe]

Yep. .

And liberals think I'm judgmental...

 

[work in progress]

Geeze Louise...where to start...where to start.
More than one things is called "money" these days, including some things which function as money but aren't. Only the fed creates money, but things which function as money can be created in the private sector. But if you go to a bank to get a home loan, you get money created by the fed. And they do it using their creation, the central bank. Ordinary "real" banks cannot create money out of thin air the way the fed can. (Physical money is created only by the Treasury Dept.)
Fractional reserve banking - Wikipedia, the free encyclopedia

The Federal Reserve System is not a true central bank in the first place; since it is made up 12 regional reserve banks...with the New York Fed being the largest and major controlling interest...no surprise. Here's what the official site of the Fed and the Wikipedia entry doesn't tell you about the regional members of the system:

The Federal Reserve consists of 12 regional Federal Reserve banks, with boards of Directors, under an umbrella direction of the 7 member Federal Reserve Board in Washington, with the power to determine major aspects of banking activity, such as setting interest rates, and the reserve and other operational requirements. There are no shares of the Washington Fed Board organization; the only “ownership” of the Fed is in shares of each of the 12 regional banks which are entirely owned by the private member banks within their respective districts, according to a formula based on their size (they must subscribe to the shares with 3% of their capital plus surplus). The ownership is highly restricted in that such ownership is mandatory; the shares can’t be sold; and they pay a guaranteed 6% annual dividend..

The Federal Reserve System puts itself forward as a non-profit organization that turns over its operating profits to the U.S. Treasury, after all expenses, including the 6% dividend to member banks. However this misses the point on several scores. First, the banking profits coming through the privileged money creation process mainly occurs at the member bank level of operation, and those profits are not turned over to the Treasury. That is, the net earnings from the member banks seigniorage privilege are not turned over to our government but kept by the private member banks. For England this amount has been estimated at 41 Billion Pounds per year. For the US we think it’s between $100-200 billion per year; but we need to know the amount more precisely from the Fed itself.
This money creation which is put into the system when the banks extend loans, eventually becomes a source of funding when our government’s bonds are sold to the public. Here is how Wright Patman, former House Banking and Currency Committee Chairman for 16 years criticized that process:
“I have never yet had anyone who could, through the use of logic and reason, justify the Federal Government borrowing the use of its own money….I believe the time will come when people will demand that this be changed. I believe the time will come in this country when they will actually blame you and me and everyone else connected with the Congress for sitting idly by and permitting such an idiotic system to continue.”

​

Is the Federal Reserve System a Governmental or a Privately controlled organization? | AMI (American Monetary Institute)

So, to recap: not only are the banks creating money out of thin air through the magic of fractional reserve requirements, they are even loaning artificially created money back to the Government so they can sell treasury bills! And all this time, you have been harping about the Government without realizing that the Fed is really controlled by the bankers, not the Congress or the Fed Chairman.

Your argument doesn't even support your claim about capitalism.

Okay, if you missed the link between growth-dependent economics and rising carbon emissions, then a picture shows it better...especially how highly populated and low GDP regions have much lower per capita carbon emissions, compared with consumer-driven economies addicted to consumption:

Note that the final comparison between low income and high income nations, shows the developed nations are responsible for almost three times the carbon emissions as the more populated poorer nations as a whole. This study by Sattherwaite - which compares the effects of population growth vs. economic growth on carbon increases and climate change, clearly shows that it is economic growth that is acting as the primary driver behind rising carbon levels.

This worked so well in the old USSR & PRC, where they still had shoddy consumer goods, but just far fewer of them.

China in the days of Mao, did not have toxic cities where it's dangerous just to breathe the air on most days! Present day capitalist-communist China's rise an economic power will be very shortlived, as even now, prime agricultural land in the western region has turned to desert because of industrial farming practices and pollution; while other natural resources are becoming scarce.

 

[Bunyip]

Sorry bunyip, I had to trace this tangent back because I forgot what we're talking about. My first reply was uncalled for - must have been the gin and tonics doing my typing for me.

Anyway, people in grinding poverty are the easiest people to exploit. I can't see how this is evidence of a natural limit to capitalism. If anything, it's evidence that capitalists' tendency to squeeze producers into taking on ever increasing workloads with ever diminishing returns only strengthens their position.

Thanks for the apology, Cheers.

I can elaborate on why I see that as a natural limit to capitalism.

At the heart of Western capitalism is a crucial assumption, it depends upon an environment with potentially unlimited growth. Corporations must grow to survive, markets must expand, new low wage frontiers must be harnessed, and cashed up new consumers must elevate themselves from those very same low wage frontiers.

Capitalism as we know it can not be constrained into a reality of finite resources and natural limits. The present model and practice of capitalism is siml,y not sustainable.

 

[Revoltingest]

At the heart of Western capitalism is a crucial assumption, it depends upon an environment with potentially unlimited growth. Corporations must grow to survive, markets must expand, new low wage frontiers must be harnessed, and cashed up new consumers must elevate themselves from those very same low wage frontiers.

When examining any system, in this case the economic system of capitalism, one must be careful not to confuse the necessary conditions for the system to exist & the system responses to current conditions. To have capitalism exist, the necessary conditions would be people, the ability to associate, productive assets, & efficiencies gained by hiring & trading with others. Capitalism will happen whether markets are shrinking, static, or expanding. If a market expands, businesses will naturally expand into it. This expansion is not a necessary condition, but rather a system response to the increase in market size. Yes, there is synergy between market size & business, but it is still only a system response.

Note about corporations: People often conflate "company", "business" & "corporation". Companies & individuals are the entities which conduct business. Companies are owned by people. Corporations (be they large or a single person) are just one of several forms of company ownership by people, others being sole proprietorships, associations, partnerships, etc. And corporations, like other business organizations, need not expand to survive. Quite often, they must contract or face insolvency. I see this with my tenants, some of whom downsized when the crash of 2001 hit. (The crash of 2007 actually began in 2001, btw. People not running businesses just didn't notice it til the stock market started tanking 6 years later.)

Capitalism as we know it can not be constrained into a reality of finite resources and natural limits. The present model and practice of capitalism is siml,y not sustainable.

Everything "as we know it" will change because of technology, expanding populations, & environmental change/degradation. This change will affect every economic system, not just capitalism. The problem is not capitalism...it's the problem, ie, we're polluting & denuding our environment, even in socialist countries (or what we call "socialist"). We can regulate the size of our population & what is done to our environment. Even non-capitalist countries would have to face the same thing.

 

[Willamena]

One major problem with Capitalism is the shift key. It's a whole other key you have to press to get Capitalism. And sometimes it gets stuck, and then you can't have anything BUT Capitalism. It's everywhere.

 

[zenzero]

Friend Sunstone,

One Problem with Capitalism?

Can you show me a single 'ism' that is PERFECT?

Its another view like so many other. As mentioned nature always balances between good and bad and so life is BALANCED and life keeps moving along. Rewards and punishment walk hand in hand.

Love & rgds

 

[Alceste]

Thanks for the apology, Cheers.

I can elaborate on why I see that as a natural limit to capitalism.

At the heart of Western capitalism is a crucial assumption, it depends upon an environment with potentially unlimited growth. Corporations must grow to survive, markets must expand, new low wage frontiers must be harnessed, and cashed up new consumers must elevate themselves from those very same low wage frontiers.

Capitalism as we know it can not be constrained into a reality of finite resources and natural limits. The present model and practice of capitalism is siml,y not sustainable.

I agree. That's one of the first conclusions I drew about our economic system as soon as I understood how it works. The faith that the political right places on the likes of Donald Trump and Paris Hilton to find a way to continue to grow an economy that has reached its natural limit really amazes me.

 

[Sunstone]

I agree. That's one of the first conclusions I drew about our economic system as soon as I understood how it works. The faith that the political right places on the likes of Donald Trump and Paris Hilton to find a way to continue to grow an economy that has reached its natural limit really amazes me.

I once heard it said, by a businessperson, that businesspeople tend to make lousy economists. I no longer recall his reasoning, but I was in business at the time I heard that, and I do recall that his reasoning seemed to make sense to me.

 

[Alceste]

I once heard it said, by a businessperson, that businesspeople tend to make lousy economists. I no longer recall his reasoning, but I was in business at the time I heard that, and I do recall that his reasoning seemed to make sense to me.

I think there's a very powerful form of cognitive bias stemming from self interest.