I use a different definition of capital. namely physical capital such as factories, machines, tools etc. the direction of resources to increase the stock of (physical) capital id the same as a (physical) process irrespective of the presence of a market economy. the difference is that there are different 'signals' in a planned and market economies to achieve the same objective.
What "different signals"?
"Bureaucrats" are risk averse because they are generally part of large organizations that are hard to steer. sudden changes in direction a generally very disruptive in large organizations, both in the public and private sectors. the complexity of an organization means that micromanaging change is near impossible and trying to do so is disastrous because "bureaucrats" do have limited knowledge. The knowledge limits also apply to CEO's because it is a property of human cognition, not social class. The priorities of "management" in the private sector are virtually identical, and due to the principle-agency problem there is no guarantee that they will maximize profits and share holder value.
The main difference is that in a capitalist system there are more immediate rewards and punishments for risk. Where those incentives are weak or non-existent, sloth and risk-avoidance prevail with major differences in results. Results, something liberals rarely want to talk about. The much prefer to go on about their intentions.
Most Communists don't advocate "equality of outcome", but want a "universal abundance" of goods and services in which everyone would have equal access to as the common ownership of the people.
No sooner said than done. Advocate, want = intention.
In the early period of 'socialism' (the lower phase of communism) income inequality persists. This is courtesy of Stalin who in 1931 condemned the goal of income equality as "utopian". He favored the use of "incentives" to encourage people to work as he did not believe moral incentives alone would increase labour productivity.
I'm surprised you brought him up. Stalin, along with Hitler and Mao are the prime examples of what goes wrong with too much concentration of power in the hands of too few or the one--as socialism so often does.
The Soviet Union inherited a market system, and whilst it didn't play the role of economic "activator" in motivating economic activity because that role was performed by the planning authorities, the use of wage labor in the USSR led to income inequalities. This led to a kind of "labour aristocracy" in which those who were considered the most productive got the greatest rewards in the 1930's, such as Alexy Stakhanov, a coal minor who set a new record in mining the amount of coal during his shift (mainly because he had the equipment to do it). Income inequality begun to fall along administrative lines with the "bureaucrats" getting paid more than the workers. Many people regard this as a betrayal of communism and symptomatic of communism being a system of class rule and may have a point. It was also very hard-headed and practical decision in a country that desperately needed to industrialise. to a greater or lesser extent "moral" incentives to hard work really only apply amongst intellectuals who have the time to decide what is of value to them and represents a very "high" level of over-all development.
All that is an argument against income being concentrated in government. Capitalism is the only economic system which actually best supports freedom. It's even better than anarchy since government's primary job under capitalism is the protection of property, as part of it's mandate to maintain good order. To paraphrase Franklin: He who trades too much liberty for security will eventually end up with neither.
How is the government self-regulating any different from the market self-regulating?
The government enforces corporate law as well as the law for individuals. How is that self-regulating? The issue is too much regulation, not that it regulates? But that doesn't answer the question: how can a government be it's own watchdog?
Capitalism is not a universal term for economics nor is it the only system that works. There is also this idea that its either capitalism or communism. This is also false.
Yes, it's capitalism, socialism or anarchy. Communism is just the most extreme form of socialism. Fascism is socialism where ownership the means of production remain in private hands but under government control. It can be headed by a dictator or an oligarchy just like communism.
I believe capitalism to be the best system but it has to be regulated and with a government with socialistic tendencies to have the best results.
Which socialist tendencies? First, to clarify, technically all government is socialism. But the modern use of the word carries an anti-capitalist Big Brother meaning where government claims knows what's best for you, but in reality its first priority is inevitably the acquisition of power for an elite class.
I take it that you are treating "capitalists" and "private sector" as synonymous? As well as "force" and "law"? And, arguably, "jobs" and "wealth"?
Capitalists and private sector, pretty much. But force when talking about government is what's used to "enforce" the law (or government's immoral will). And jobs and wealth certainly aren't synonymous.
Jobs are created by the existence of a need that is strong enough for people to want to exchange some of their power and convenience in exchange for the cooperation of other people. In that sense, governments are perhaps the quintessencial job creators. Very few other human groups or activities ever create or express more needs.
Jobs are created by the need to produce, for which the worker contracts some of his time, liberty and labor for payment.
Come to think of it, jobs and wealth, far from being the same thing, exist essentially at the expense of each other.
Yes, as I said, they aren't the same thing. Some jobs pay minimum wage, others pay millions.
Jobs are by definition the perceived need of letting go of part of one's own wealth on behalf of someone else's.
What?
Wealth is by definition the ability to convince others that they should indulge one's requests to some degree, for some sort of compensation.
What squared? The first target of the liberal is always the dictionary.
An ethical government is IMO unsuitable for making people rich, but that is overall very much a good thing. Capitalism is however interested in making people rich, usually by suffocating job creation to the best of its ability.
OMG!
What straw man? You said government doesn't create jobs, a transparent fallacy. Take a look at the economy everywhere there is a weak governing system, and where there's a strong one. See a pattern?
I've just reread this thread, and I'd like to clarify. Don't get me wrong, without the government's active assistance, business would be a difficult thing in America. But you still need the person who is willing to do the work and is smart enough to succeed.
That's why I said it was a stawman argument. I'm not disagreeing with the point that government does provide some necessary services. Whatever is the "right" amount, we're so far beyond that point it has become moot.
