Results are out! Find what you need...fast. Get quick advice or join the chat
Hey there Sign in to join this conversationNew here? Join for free

GDP growth at all costs is the essence of capitalism.

Announcements Posted on
    • 36 followers
    Offline

    ReputationRep:
    (Original post by agnelodsouza)
    Essentially, to acquire food, fuel and shelter people need the capital to do so. To have capital, you need jobs.
    Of course, but the aim isn't to create jobs; that view demonstrates a fundamental misunderstanding of what an economy is for. Capital is a multiplication of labour so a byproduct of more capital is actually less work as we allow tools and machines to take the intensity out of the weath creation process. If we could provide all the food and fuel we needed for a mere 10 hour week would we still have people complaining about the 'lack' of jobs?
    • 3 followers
    Offline

    ReputationRep:
    GDP growth is nessecary as long as population growth continues. Otherwise people get poorer, and eventually start to starve. Anti-capitalists have shown quite well the effects of this in the USSR and Mao's China. Millions were killed. I'd take capitalism any day.
    • 29 followers
    Offline

    ReputationRep:
    (Original post by chefdave)
    Uh oh, I sense a money creationist analysis. 'Fiat' had precious little to do bubble bursting, the system broke down simply because house prices had become so detached from average wages that people could no longer afford to make the repayments on the homes they were living in.
    Lol how many red gems do you have? :rofl:

    In response to your post, you're making exactly the same point I was. The monetary price (and what it was worth as a debt commodity) of the house bore no relation to its true value. This was allowed to elevate to unbelievable levels until the bubble burst.
    • 0 followers
    Offline

    ReputationRep:
    (Original post by chefdave)
    Of course, but the aim isn't to create jobs; that view demonstrates a fundamental misunderstanding of what an economy is for. Capital is a multiplication of labour so a byproduct of more capital is actually less work as we allow tools and machines to take the intensity out of the weath creation process. If we could provide all the food and fuel we needed for a mere 10 hour week would we still have people complaining about the 'lack' of jobs?
    In my opinion, I no longer feel that we live in a society that works towards the fundamentals of a pure economy. However, I do agree that yes, we need to be focusing towards a more effective allocation of resources which would evaporate the concern over jobs by default.
    • 5 followers
    Offline

    ReputationRep:
    (Original post by chefdave)
    Growth at all costs is communist style thinking, i.e growth-addicts want to direct UK workers around until the tractor production GDP figures show the economy is doing well. In a capitalist/libertarian system we'd remove the burdens and taxes that restrict business and then let the private sector decide for themselves how much 'growth' they want.
    You know what you are talking about.

    Ever heard of this? http://en.wikipedia.org/wiki/The_Road_to_Serfdom
    • 0 followers
    Offline

    ReputationRep:
    (Original post by jumpingjesusholycow)
    Lol how many red gems do you have? :rofl:

    In response to your post, you're making exactly the same point I was. The monetary price (and what it was worth as a debt commodity) of the house bore no relation to its true value. This was allowed to elevate to unbelievable levels until the bubble burst.
    And thats why capitalism needs to be reigned in. Or edited in some way.
    • 29 followers
    Offline

    ReputationRep:
    (Original post by agnelodsouza)
    And thats why capitalism needs to be reigned in. Or edited in some way.
    I agree :dontknow:
    • 2 followers
    Offline

    ReputationRep:
    (Original post by jumpingjesusholycow)
    Lol how many red gems do you have? :rofl:

    In response to your post, you're making exactly the same point I was. The monetary price (and what it was worth as a debt commodity) of the house bore no relation to its true value. This was allowed to elevate to unbelievable levels until the bubble burst.
    This is correct but it has a lot to do with the artificial interest rates. Our government can't tell people what to sell/buy houses for but if the banks give bigger loans more money will change hands hence the bubble. The million pound question is whether or not the government made the banks give the loans in the first place, recently the banks have been getting it in the neck from the government for not giving loans.
    • 0 followers
    Offline

    ReputationRep:
    (Original post by TheHansa)
    This is correct but it has a lot to do with the artificial interest rates. Our government can't tell people what to sell/buy houses for but if the banks give bigger loans more money will change hands hence the bubble. The million pound question is whether or not the government made the banks give the loans in the first place, recently the banks have been getting it in the neck from the government for not giving loans.
    Its not particularly a million pound question. We have central planning of sorts already embedded within our economic systems. Monetary authorities control the money supply, which in turn influence interest rates which initiates an overflow/contraction of lending. Indirectly, governments and monetary bodies do direct consumers towards allocating their resources in areas which may not be in the consumers best interest.
    • 36 followers
    Offline

    ReputationRep:
    (Original post by natchina)
    localism is not the same as luddite-ism. it just means local areas sustain themselves better.

    so for example, instead of one mega factory that employs 200 people making crappy plastic cheese for an entire country, cheese could be made locally employing thousands up and down the country. the same could apply for most food, clothes, shoes, furniture etc.
    It's a nice idea but would be impossible to enforce in a free market because individuals would get to decide whether the higher quality locally produced cheese warrants an increase in working hours down at the local cheese farm.

    You've changed two variables anyway (quality and time) which makes it an unfair comparison. If we keep the quality of the cheese constant surely it would make more sense to have one factory with 200 workers producing all the nation's cheese rather than 10 regional factories all employing 50 workers each?
    • 1 follower
    Offline

    ReputationRep:
    (Original post by chefdave)
    I disagree, justice and a level playing field is what governments should be aiming for. If they see a regulation that prevents small businesses from competing with larger organisations they should have the decency to identify the problem and subsequently remove the regulation so it no longer hampers the smaller operators. If an environment like this produces growth then great, but growth isn't the overriding goal.
    Firms only exist to produce things so laws on businesses are for the purpose of effciency. The government doesnt care about making things equal between firms and rightly so because firms who cares about equality between soemthing things that arent human. You won't find a law that everyone agrees lowers effciency but levels the playing field between firms.
    • 1 follower
    Offline

    ReputationRep:
    (Original post by agnelodsouza)
    I'm sure your aware of how the last several years have panned out. We've all just been through the worst economic recession since the Great Depression. This time its not any normal crisis, its a Financial Crisis. The so called tools which are "part of the system" and leads to people being better of are the very tools which have put a lot of people back below the poverty line globally!Cheap money and debt have wrapped a web around us, we LIVE in a debt economy, and that distorts what true capitalism is supposed to achieve: a accurate allocation of goods and services to where they are needed most.
    The financial crisis may have been caused my too much money being lent as morgages but that doesn't mean that the whole idea of lending is wrong. Lending is good because it finances business which produces all the things around us. Debt does not at all distort allocation it improves it, the financial system allows resources to be allocated quickly to the best investment projuects in the world. Imagine if I was a scientist who discovered a cure for cancer and the drug can be developed for £100m. Under the current system I could take the idea to a company who can quickly raise the funds from investors all over the world and the drug would be made. In an economy without a finacial system, what am I supposed to do? Go and get a part time job until I have saved up £100m and then make it? You won't find a country with high living standards that doesnt have a developed finacial system.

    I think the arguement about debt is based on people applying their Dads advice of not getting into debt and living beyond your means to the economy. It doesnt matter whether you finance through debt or equity, they both do the same job.

    I think it is amazing how well capitalism has worked. Think back 150 years, we are probably 10x better off now than back then, this has been achieved by the growth that capitalism allows. If you went back and didnt achieve growth people would be worse off. There is no substitute for growth and it is more growth that will make us better off for the future. We have been through a bad reccession but this is a small price to pay, things havent changed that much and we are still living a life that people 150 years ago wouldnt have believed.
    • 0 followers
    Offline

    ReputationRep:
    (Original post by Sternumator)

    I think it is amazing how well capitalism has worked. Think back 150 years, we are probably 10x better off now than back then, this has been achieved by the growth that capitalism allows. If you went back and didnt achieve growth people would be worse off. There is no substitute for growth and it is more growth that will make us better off for the future. We have been through a bad reccession but this is a small price to pay, things havent changed that much and we are still living a life that people 150 years ago wouldnt have believed.
    I think your missing my point here, I'm not implying that capitalism is bad. It has been the reasons, as you point out, for the exponential growth in living standards and well being. However , my argument lies in the fact that if we do not regulate the current evolved form of capitalism that exists today in the financial system, the next recession will be even worse than the current one. The financial system no longer caters towards public interests, rather it grew around itself and its own interests.

    Lending will always simulate growth, but it needs to be purely related to real effective growth. Not financial fabricated growth.We all need innovators to come with solutions to help society towards betterment. But we also need the correct lending climate to ensure a more sustainable path towards growth. I'm sure we would all appreciate a smoother path towards better living conditions.
    • 32 followers
    Offline

    ReputationRep:
    Capitalism has nothing to do with GDP. This linking up of capitalism and "growth" is very annoying.
    • 0 followers
    Offline

    ReputationRep:
    (Original post by natchina)
    its depressing when so called socialists, such as the new french president francois hollande, try and compete with capitalists on the question of GDP growth.

    GDP growth is impossible without cheap money, debt and the consumerist materialistic culture.
    GDP growth can occur without a materialistic culture; if everyone was alturistic then GDP growth would occur for the sake of helping others. The reason socialists can't match the free market is because an economy is too complex to centrally plan; free trade of goods and services between individuals is more effective for meeting the desires of those individuals than managed distribution of goods and services by a central authority.

    debt. cheap crap nobody needs. cheap food that makes people ill. destruction of the environment. depletion of natural resources.
    Debt is only a bad thing if it can't be paid back. If someone goes into debt to start up a business, and that business then produces enough to repay the debt then what is the problem? If there is no lending of money then capital cannot be used efficiently - instead of being used to increase production it goes unused.

    Debt to facilitate early consumption isn't so bad either; it gives people access to goods before they would otherwise be able to afford them and does not waste capital in the long term. It is better to buy a house with a 20 year mortgage than to have to save up for 20 years without a house.

    Furthermore cheap food is not a bad thing and the quality of food is higher in countries which have high GDPs than those which don't. Do you think you will find higher quality food in Ethiopia or in China?

    Finally, the environment is harmed most in areas with a lack of property rights and is damaged in any country with significant industry whether capitalist or not (although that said the environments of East Germany, Poland, and the USSR suffered more than the environments of Britain, France and the USA). Besides that - bettering of human lives takes precedence of protecting the environment.

    Depletion of natural resources is not as big a problem as it is made out to be; for a start they aren't going to be used by anyone else and they would be consumed under system of government (from free market liberal governments to totalitarian regimes) in place. But more than that, in a capitalist system there is more incentive to conserve scarce resources for the future than in other systems - the more scarce a resource is the higher its price gets.

    In any case, we've barely scratched the surface of the Earth when it comes to natural resources, and we haven't even started exploiting space yet.

    this is what GDP growth really means. it is the very essence of capitalism and it is simply not sustainable.
    But it is sustainable. Food production, even with today's technology, is nowhere near maximum. If Ethiopia and Zimbabwe had free markets they would produce enough food to feed hundreds of millions more. If the American and European governments did not interfere with farming then again hundreds of millions more could be fed.

    Energy production is also below the maximum; had it not been for environmentalists opposing the construction of nuclear plants Europe and America would consume far less fossil fuels than they currently do. There are also massive amounts of solar and geothermal energy which go unutilised. Soon we will have access to nuclear fusion and all the energy we could possibly need.

    We can sustain our consumption of metals by mining Antarctica, parts of Siberia, Canada, Australia, Africa and Central Asia, and the ocean. Later in the century, or in the next century it will be possible to mine asteroids; even a small asteroid contains trillions of dollars of precious metals.

    instead of trying to outdo capitalists on the how they are going to stimulate growth, socialists should be trying to come up with new and more sustainable models for society that do not rely on never ending cycles of boom and bust and destructive consumerism.
    I hope they do; it will make it easier to win arguments against them. The only way they could create such a society is by preventing people from creating wealth.
    • 1 follower
    Offline

    ReputationRep:
    (Original post by agnelodsouza)
    I think your missing my point here, I'm not implying that capitalism is bad. It has been the reasons, as you point out, for the exponential growth in living standards and well being. However , my argument lies in the fact that if we do not regulate the current evolved form of capitalism that exists today in the financial system, the next recession will be even worse than the current one. The financial system no longer caters towards public interests, rather it grew around itself and its own interests.

    Lending will always simulate growth, but it needs to be purely related to real effective growth. Not financial fabricated growth.We all need innovators to come with solutions to help society towards betterment. But we also need the correct lending climate to ensure a more sustainable path towards growth. I'm sure we would all appreciate a smoother path towards better living conditions.
    The financial system we have now has allowed all of the growth to happen. You said before 'We LIVE in a debt economy' which sounded like you doubt the whole system. May be the financial system can be regulated better but that is a complicated thing for the experts to argue about. The system as a whole does work well as it is.
    • 7 followers
    Online

    ReputationRep:
    Not necessarily. The aim of capitalism is to benefit the capitalists and this doesn't actually necessitate growth. A lot of bankers are making more money now than they were in the boom. George Soros made a killing out of Black Wednesday.

    Different capitalists want different things for their benefit. Capitalism as such doesn't have any unified goal.
    • 32 followers
    Offline

    ReputationRep:
    (Original post by anarchism101)
    Not necessarily. The aim of capitalism is to benefit the capitalists and this doesn't actually necessitate growth. A lot of bankers are making more money now than they were in the boom. George Soros made a killing out of Black Wednesday.

    Different capitalists want different things for their benefit. Capitalism as such doesn't have any unified goal.
    Capitalism does not have goal. Capitalism is a system. Only people have goals. And under capitalism people are free to pursue their own goals by freely associating with others. That is the essence of capitalism. People trying to make their lives better off their own effort and the cooperation of others.

    Capitalism is the miraculous system that gets all the peoples of the world, all with different goals, tastes, hates, and gets them into line to freely cooperate with each other mutual gain.
    • 36 followers
    Offline

    ReputationRep:
    (Original post by Classical Liberal)
    Capitalism does not have goal. Capitalism is a system. Only people have goals. And under capitalism people are free to pursue their own goals by freely associating with others. That is the essence of capitalism. People trying to make their lives better off their own effort and the cooperation of others.

    Capitalism is the miraculous system that gets all the peoples of the world, all with different goals, tastes, hates, and gets them into line to freely cooperate with each other mutual gain.
    Exactly. It's not difficult this economics thing, is it?
    • 7 followers
    Online

    ReputationRep:
    (Original post by Classical Liberal)
    Capitalism does not have goal. Capitalism is a system. Only people have goals. And under capitalism people are free to pursue their own goals by freely associating with others. That is the essence of capitalism. People trying to make their lives better off their own effort and the cooperation of others.

    Capitalism is the miraculous system that gets all the peoples of the world, all with different goals, tastes, hates, and gets them into line to freely cooperate with each other mutual gain.
    Cliches aren't going to get us anywhere.

    Ok, maybe I phrased it wrong. No, capitalism in and of itself doesn't have a goal as it's a system. But systems are generally set up and maintained with certain aims in mind. Given that capitalism is, by definition, a system in which the means of production are privately owned (on a market economy you could add), these proprietors are those who benefit most from it.

Reply

Submit reply

Register

Thanks for posting! You just need to create an account in order to submit the post
  1. this can't be left blank
    that username has been taken, please choose another Forgotten your password?
  2. this can't be left blank
    this email is already registered. Forgotten your password?
  3. this can't be left blank

    6 characters or longer with both numbers and letters is safer

  4. this can't be left empty
    your full birthday is required
  1. By joining you agree to our Ts and Cs, privacy policy and site rules

  2. Slide to join now Processing…

Updated: May 16, 2012
New on TSR

Find out what year 11 is like

Going into year 11? Students who did it last year share what to expect.

Article updates
Useful resources
Reputation gems:
You get these gems as you gain rep from other members for making good contributions and giving helpful advice.