Isms of economics & politics
Inspired by
urban_forager, I thought it time to re-explore the terms below with an economic eye, separated from the associations we may have built up around them.
This in an effort to begin explorations of how we arrived at today's system where we consume and dispose grossly in excess of our basic needs. Subsequently then to determine if there are alternative ways of life already in existence and flourishing.
India's transition to capitalism occurred in great glory in 1991, and hopefully this will help me link my perception of India's changes with it's economic outlook.
My reading so far is leading me to understand that there is no adequate, independent alternative to capitalism, but several solutions exist to its problems - some of them borrowed from other systems. It is also confirming my belief that a lot of philosophic and socio-economic problems that are blamed on Capitalism are only coincidentally correlated to it, rather than actually derived from it.
Compilation of knowledge and definitions from Wiki:
Most useful Wiki link on a critique of capitlism.
Capitalism: is an economic system in which wealth, and the means of producing wealth, are privately owned and controlled rather than commonly, publicly, or state-owned and controlled. Investments, distribution, income, production, pricing and supply of goods, commodities and services are determined by voluntary private decision in a market economy. Laissez-faire (French, leave to do by itself) capitalism signifies minimizing or eliminating state interference in economic affairs and the competitive process, allowing the free play of supply and demand. Laissez-faire capitalism has never existed in practice.
Pros
- Can elevate standard of living (measured by GDP) by creating better availability of food, clothing, housing and healthcare
- Division of labor leads to reduced hours of work per week
- Division of labor leads to decreased participation of children and eldelry in the workforce.
- Great potential for each individual to raise their income and standard of living
- Distributes wealth commensurate to skills, abilities and efforts.
- Incentivizes improvement of skills, abilities and efforts, leading to increasing quality of life.
- Incentivizes innovation and new explorations, leading to increasing quality of life.
- Encourages competition and therefore increases quality of products and services
- Provides a complete range of consumer choices in products and services (High quality, high price AND lower quality, lower price products are all available within the system)
- (Very Arguably) Supply & Demand laws make the production and availability of items efficient and accurate to market needs.
- (Arguably) Economic freedom correlates with higher average income per person / higher average quality of life for all people
- The most developed and tested independent, active system
Cons:
- Market instability, market failure (pursuit of self interest leads to bad results for society. Social good subjugated to profit making.)
- Rewards and is heavily biased towards those who already possess resources - leading to sustaining the pattern, exponentially increasing differences in wealth when ability or effort do not differ appreciably.
- Empowers those who already possess resources / capitalist class - Underlings can seldom complain about their bosses.
- Focus on absolute monetary value undermines legitimacy of spirituality,
sentiment, human rights and other non-measurable paradigms.
- Leads to exploitation / overuse of resources (as a result of overproducing commodities for anticipation of profit) - manifested in the past by imperialism over other nations, and today as imperialism over nature.
- (Arguably) Leads to exploitation. By definition every worker must work to create value that must at least equal the cost of their survival, but furthermore create additional value that they give away in order to create profits for someone else. IOW: An employer pays a laborer less than what they are worth so that they can make a profit on that labor. Therefore a worker is being exploited by those who retain profits.
- (Arguably) Leads to Commercialism because it benefits the market to turn all items into objects for the purpose of generating profit.
- (Arguably) Leads to Consumerism and Waste because short lived products and planned obsolescence benefit the market.
- (Very Arguably) Leads to Materialism as a result of emulation up the social heirarchy.
- (Arguably) expends wasted energy / resources on marketing rather than on useful production
One of problems of Capitalism is the subjugation of social good to profit making. In my particular interest is environmental sustainability. One solution that I am not seeing anyone discuss is valuing the environment. It is currently not part of metrics and profitability because it hasn't been given any value. If were started off with an artificial value to represent its correlation with our own longevity and survival, it would quickly become part of the system and benefit it. If untouched / virgin land were more expensive than brownfields, or if there were govt. levied taxes on the environmentally irresponsible usage of resources, the environment (and therefore one aspect of larger social benefit could easily and usefully be absorbed into the current capitalist system.
Consumerism: is the equation of personal happiness with consumption and the purchase of material possessions. In economics, consumerism refers to economic policies placing emphasis on consumption. In an abstract sense, it is the belief that the free choice of consumers should dictate the economic structure of a society. Consumerism is used to describe the tendency of people to identify strongly with products or services they consume, especially those with commercial brand names and perceived status-symbolism appeal, e.g. a luxury automobile, designer clothing, or expensive jewelry.
Commercialism: is the tendency within capitalism to turn everything into objects, images, and services sold for the purpose of generating profit. There is also a tendency for intangible things such as happiness, beauty, or health to be given a monetary value or to be spoken of as commodities
Materialism: refers to how a person or group chooses to spend their resources, particularly money and time. Literally, a materialist is a person for whom collecting material goods is an important priority (a person who primarily pursues wealth and luxury). Many believe that a considered and realistic form of materialism leads to economic behaviors supporting a sustainable community. For example, recycling, thrift shops, garage sales, and the like are materialistic in that they show respect for real resources, rather than just throwing them out. Criticism of materialism stems from philosophic or spiritual ideas that a person cannot own his possessions or tools, an attitude of stewardship toward them endangers mental health.
So, what are the alternatives ?
1) Planned Economy: A market economy is an economic system based on the division of labor in which the prices of goods and services are determined in a free price system set by supply and demand (Capitalism). A planned economy is one in which a central government determines the price of goods and services using a fixed price system. A planned economy is an economic system in which the central government makes all decisions on the production and consumption of goods and service.
Pros:
- Stability and mitigation of risk
- Conformance to a grand design which can lead to planned efficiencies (rather than sporadic and inefficient growth)
- Meeting collective rather than individual needs (individual profit motives are eliminated)
- Ability to support projects that are needed, rather than projects that can be currently afforded
- Removal of class divisions that arise as a result of economic divisions of labor.
Cons:
- mostly stem from the problem of "who plans the economy and how"
- Insufficient resource distribution with surpluses and shortages (the grand plan can never be perfectly calculated & the automatic forces of supply and demand cannot help regulate production)
- Determination of what is socially good or necessary is made by a small group of people, without adequate or proper representation of the society that good will ultimately serve. The only solution to this is to have a democratic political governance along with a planned economy - such as the Participatory and democratic economics of a Fascist system.
- Loss of political freedom - Milton Friedman says economic freedom is a requisite
- Does not incentivize innovation, unless mandated by policy. Thus avenues for development are narrowed by the perspective of the same small group of people.
- Hegemonic operating structure infringes on individual freedoms and personal choice
- Incentivizes corruption of those who plan
- (Arguably) leads to elitism (some people decide what's good for others)
2) Anarchism: argues for a total abolition of the state, with many anarchists opposing capitalism on the grounds that it entails social domination (through inequalities of wealth), involuntary relations and coercive hierarchy (through the perceived pressure on individuals to engage in wage labour).
Pros:
- (Arguably) Social freedom
Cons:
- No clear understanding of how the economy will work
- Statement of intellectual criticism rather than an independently active system
3) Ecofeminism: criticises capitalism for defining the natural world as simply a body of resources to be exploited and reshaped to serve human purposes and interests. They also see it as inherently sapping the relationship between humans to one another and to the natural world. Ecofeminists see capitalism as a patriarchal construction based on the colonization of women, nature, and other peoples.
Pros:
- Aims to reunderstand productivity such that it is in balance with nature
Cons:
- Intellectual statement of criticism rather than a developed, active system
4) Socialism: advocates public or state ownership and administration of the means of production and distribution of goods, and a society characterized by equality for all individuals, with a fair or egalitarian method of compensation. Economically, it argues for cooperative/community or state control of the economy which may or may not be associated with democratic control by the people over the state. Socialism advocates (to varying degrees) economic equality and the eradication of poverty and unemployment. Many confuse socialism with both Marxism and social welfare
policies.
Pros and Cons - Similar to planned economies
- Also dis-incentivizes improvement of skills, effort or innovation
5) Marxism: argues for collective ownership of the means of production and the eventual abolition of the state, with an intermediate stage, of indeterminate length, in which the state will be used to eliminate the vestiges of capitalism.
6) Fascism: is a radical, authoritarian nationalist ideology that aims to create a single-party state with a government led by a dictator who seeks national unity and development by requiring individuals to subordinate self-interest to the collective interest of the nation or race. Economically - a corporatist approach: where private corporations or individuals subordinate their production to the needs of the state, while preserving private property. However, there is a branch of Fascism with participatory economics and inclusive democracy for economic decision making, production, consumption and allocation of resources.
Marxists argue that it is state capitalism which emerges as a result of government intervention to rescue capitalism in crisis. It could be considered a merger of state and corporate power.
Pros: - Similar to planned economies
- (Arguably) Aims at collectivist good over individual interests
- Basic economic needs can be met for all
- Equalizer and removal of power imbalance
Cons: - Similar to planned economies
- Promotes success at the cost of social equality
- Taxpayers pay for private enterprise follies
- Absence of ability to accumulate wealth or improve standard of living
7) Communism: promotes the establishment of an egalitarian, classless, stateless society based on common ownership and control of the means of production and property in general. Considered to be a branch of socialism. Economically it advocates common ownership of the means of production and economic decision making of a society, culminating in the abolishment of private ownership of capital, property and government. Thereby, disagreeing with capitalism and economic liberalism on a fundamental basis.
Pros and Cons - Similar to planned economies, with observed corruption of leadership.
urban_forager, I thought it time to re-explore the terms below with an economic eye, separated from the associations we may have built up around them.
This in an effort to begin explorations of how we arrived at today's system where we consume and dispose grossly in excess of our basic needs. Subsequently then to determine if there are alternative ways of life already in existence and flourishing.
India's transition to capitalism occurred in great glory in 1991, and hopefully this will help me link my perception of India's changes with it's economic outlook.
My reading so far is leading me to understand that there is no adequate, independent alternative to capitalism, but several solutions exist to its problems - some of them borrowed from other systems. It is also confirming my belief that a lot of philosophic and socio-economic problems that are blamed on Capitalism are only coincidentally correlated to it, rather than actually derived from it.
Compilation of knowledge and definitions from Wiki:
Most useful Wiki link on a critique of capitlism.
Capitalism: is an economic system in which wealth, and the means of producing wealth, are privately owned and controlled rather than commonly, publicly, or state-owned and controlled. Investments, distribution, income, production, pricing and supply of goods, commodities and services are determined by voluntary private decision in a market economy. Laissez-faire (French, leave to do by itself) capitalism signifies minimizing or eliminating state interference in economic affairs and the competitive process, allowing the free play of supply and demand. Laissez-faire capitalism has never existed in practice.
Pros
- Can elevate standard of living (measured by GDP) by creating better availability of food, clothing, housing and healthcare
- Division of labor leads to reduced hours of work per week
- Division of labor leads to decreased participation of children and eldelry in the workforce.
- Great potential for each individual to raise their income and standard of living
- Distributes wealth commensurate to skills, abilities and efforts.
- Incentivizes improvement of skills, abilities and efforts, leading to increasing quality of life.
- Incentivizes innovation and new explorations, leading to increasing quality of life.
- Encourages competition and therefore increases quality of products and services
- Provides a complete range of consumer choices in products and services (High quality, high price AND lower quality, lower price products are all available within the system)
- (Very Arguably) Supply & Demand laws make the production and availability of items efficient and accurate to market needs.
- (Arguably) Economic freedom correlates with higher average income per person / higher average quality of life for all people
- The most developed and tested independent, active system
Cons:
- Market instability, market failure (pursuit of self interest leads to bad results for society. Social good subjugated to profit making.)
- Rewards and is heavily biased towards those who already possess resources - leading to sustaining the pattern, exponentially increasing differences in wealth when ability or effort do not differ appreciably.
- Empowers those who already possess resources / capitalist class - Underlings can seldom complain about their bosses.
- Focus on absolute monetary value undermines legitimacy of spirituality,
sentiment, human rights and other non-measurable paradigms.
- Leads to exploitation / overuse of resources (as a result of overproducing commodities for anticipation of profit) - manifested in the past by imperialism over other nations, and today as imperialism over nature.
- (Arguably) Leads to exploitation. By definition every worker must work to create value that must at least equal the cost of their survival, but furthermore create additional value that they give away in order to create profits for someone else. IOW: An employer pays a laborer less than what they are worth so that they can make a profit on that labor. Therefore a worker is being exploited by those who retain profits.
- (Arguably) Leads to Commercialism because it benefits the market to turn all items into objects for the purpose of generating profit.
- (Arguably) Leads to Consumerism and Waste because short lived products and planned obsolescence benefit the market.
- (Very Arguably) Leads to Materialism as a result of emulation up the social heirarchy.
- (Arguably) expends wasted energy / resources on marketing rather than on useful production
One of problems of Capitalism is the subjugation of social good to profit making. In my particular interest is environmental sustainability. One solution that I am not seeing anyone discuss is valuing the environment. It is currently not part of metrics and profitability because it hasn't been given any value. If were started off with an artificial value to represent its correlation with our own longevity and survival, it would quickly become part of the system and benefit it. If untouched / virgin land were more expensive than brownfields, or if there were govt. levied taxes on the environmentally irresponsible usage of resources, the environment (and therefore one aspect of larger social benefit could easily and usefully be absorbed into the current capitalist system.
Consumerism: is the equation of personal happiness with consumption and the purchase of material possessions. In economics, consumerism refers to economic policies placing emphasis on consumption. In an abstract sense, it is the belief that the free choice of consumers should dictate the economic structure of a society. Consumerism is used to describe the tendency of people to identify strongly with products or services they consume, especially those with commercial brand names and perceived status-symbolism appeal, e.g. a luxury automobile, designer clothing, or expensive jewelry.
Commercialism: is the tendency within capitalism to turn everything into objects, images, and services sold for the purpose of generating profit. There is also a tendency for intangible things such as happiness, beauty, or health to be given a monetary value or to be spoken of as commodities
Materialism: refers to how a person or group chooses to spend their resources, particularly money and time. Literally, a materialist is a person for whom collecting material goods is an important priority (a person who primarily pursues wealth and luxury). Many believe that a considered and realistic form of materialism leads to economic behaviors supporting a sustainable community. For example, recycling, thrift shops, garage sales, and the like are materialistic in that they show respect for real resources, rather than just throwing them out. Criticism of materialism stems from philosophic or spiritual ideas that a person cannot own his possessions or tools, an attitude of stewardship toward them endangers mental health.
So, what are the alternatives ?
1) Planned Economy: A market economy is an economic system based on the division of labor in which the prices of goods and services are determined in a free price system set by supply and demand (Capitalism). A planned economy is one in which a central government determines the price of goods and services using a fixed price system. A planned economy is an economic system in which the central government makes all decisions on the production and consumption of goods and service.
Pros:
- Stability and mitigation of risk
- Conformance to a grand design which can lead to planned efficiencies (rather than sporadic and inefficient growth)
- Meeting collective rather than individual needs (individual profit motives are eliminated)
- Ability to support projects that are needed, rather than projects that can be currently afforded
- Removal of class divisions that arise as a result of economic divisions of labor.
Cons:
- mostly stem from the problem of "who plans the economy and how"
- Insufficient resource distribution with surpluses and shortages (the grand plan can never be perfectly calculated & the automatic forces of supply and demand cannot help regulate production)
- Determination of what is socially good or necessary is made by a small group of people, without adequate or proper representation of the society that good will ultimately serve. The only solution to this is to have a democratic political governance along with a planned economy - such as the Participatory and democratic economics of a Fascist system.
- Loss of political freedom - Milton Friedman says economic freedom is a requisite
- Does not incentivize innovation, unless mandated by policy. Thus avenues for development are narrowed by the perspective of the same small group of people.
- Hegemonic operating structure infringes on individual freedoms and personal choice
- Incentivizes corruption of those who plan
- (Arguably) leads to elitism (some people decide what's good for others)
2) Anarchism: argues for a total abolition of the state, with many anarchists opposing capitalism on the grounds that it entails social domination (through inequalities of wealth), involuntary relations and coercive hierarchy (through the perceived pressure on individuals to engage in wage labour).
Pros:
- (Arguably) Social freedom
Cons:
- No clear understanding of how the economy will work
- Statement of intellectual criticism rather than an independently active system
3) Ecofeminism: criticises capitalism for defining the natural world as simply a body of resources to be exploited and reshaped to serve human purposes and interests. They also see it as inherently sapping the relationship between humans to one another and to the natural world. Ecofeminists see capitalism as a patriarchal construction based on the colonization of women, nature, and other peoples.
Pros:
- Aims to reunderstand productivity such that it is in balance with nature
Cons:
- Intellectual statement of criticism rather than a developed, active system
4) Socialism: advocates public or state ownership and administration of the means of production and distribution of goods, and a society characterized by equality for all individuals, with a fair or egalitarian method of compensation. Economically, it argues for cooperative/community or state control of the economy which may or may not be associated with democratic control by the people over the state. Socialism advocates (to varying degrees) economic equality and the eradication of poverty and unemployment. Many confuse socialism with both Marxism and social welfare
policies.
Pros and Cons - Similar to planned economies
- Also dis-incentivizes improvement of skills, effort or innovation
5) Marxism: argues for collective ownership of the means of production and the eventual abolition of the state, with an intermediate stage, of indeterminate length, in which the state will be used to eliminate the vestiges of capitalism.
6) Fascism: is a radical, authoritarian nationalist ideology that aims to create a single-party state with a government led by a dictator who seeks national unity and development by requiring individuals to subordinate self-interest to the collective interest of the nation or race. Economically - a corporatist approach: where private corporations or individuals subordinate their production to the needs of the state, while preserving private property. However, there is a branch of Fascism with participatory economics and inclusive democracy for economic decision making, production, consumption and allocation of resources.
Marxists argue that it is state capitalism which emerges as a result of government intervention to rescue capitalism in crisis. It could be considered a merger of state and corporate power.
Pros: - Similar to planned economies
- (Arguably) Aims at collectivist good over individual interests
- Basic economic needs can be met for all
- Equalizer and removal of power imbalance
Cons: - Similar to planned economies
- Promotes success at the cost of social equality
- Taxpayers pay for private enterprise follies
- Absence of ability to accumulate wealth or improve standard of living
7) Communism: promotes the establishment of an egalitarian, classless, stateless society based on common ownership and control of the means of production and property in general. Considered to be a branch of socialism. Economically it advocates common ownership of the means of production and economic decision making of a society, culminating in the abolishment of private ownership of capital, property and government. Thereby, disagreeing with capitalism and economic liberalism on a fundamental basis.
Pros and Cons - Similar to planned economies, with observed corruption of leadership.