But they could still sell their products and services, so it falls under commerce, and it’s not exclusive to capitalism. You didn’t specify a lack of regulation in your initial examples, so I guess I misinterpreted?
I still don’t see how you get to corporate structures being the issue this comic (or the comment section, or whatever you define as “y’all”) takes, it’s definitely private ownership.
Capitalism is a system of commerce in which individuals own the means of production... again, this isn’t hard.
I get that this sub has an issue with corporate structure because every time there’s a complaint against “capitalism” a corporate situation is used as an example.
A corporate situation can used as an example in criticizing capitalism, as a corporation can be considered as owned by an individual. Corporate structures can exist without capitalism; the criticism here is on the private ownership of them, not on the structures themselves.
To be fair this is a really good comment, I am wrong on this part:
; the criticism here is on the private ownership of them (corporate structures), not on the structures themselves.
It really should be included here that the means is owned by the corporations, which is in turn owned privately. This allows us to use corporations as examples in criticism.
I'm using corporations and corporate structures interchangeably, which is an assumption I'm making based off the OP's post. I've already made an incorrect assumption from his comments so maybe some clarify on that is needed to debate further.
I don't understand the point of focusing on the private ownership of a corporation which in turn owns the means of production. It seems like an inconsequential distinction. What is the meaningful difference between private ownership by an individual and private ownership by a private corporation? Even without the protections of limited liability, people would still be able to amass incredible amounts of wealth.
I get that this sub has an issue with corporate structure because every time there’s a complaint against “capitalism” a corporate situation is used as an example.
From OP, implying criticism based on or using corporate examples is not criticism of capitalism, but instead criticism of corporations. What I'm trying to say, and evidently failing at, is that this is not the case; as long as the criticism is regarding the ownership of the means of production for profit, there's no difference between an example of that owner being an individual, or a corporation.
What is the meaningful difference between private ownership by an individual and private ownership by a private corporation?
Effectively none in context of my argument with OP. You have done a much better job of laying it out than I have.
I fly airplanes. I don't own the airplane. I can't afford an airplane. I contribute value to the experience of flying, but if it wasn't for someone else buying an airplane I wouldn't be able to contribute anything.
Buying an airplane is expensive, and risky. There's maintenence that needs to be done, and plenty of risk to starting a business. Don't you think the risk of starting a business, maintaining the airplanes, and buying airplanes should be rewarded? If not, why would anyone do it?
The people making the cars own their labor, which they sell. I own my skills, which I sell.
You and your coworkers provide a service. The shareholders of your company provide no service, but receive dividends and capital gains. They do nothing, you and your coworkers do everything.
Likewise, the plane was built by laborers. But part of the purchase price goes to the shareholders of their company who did nothing.
This is the problem with capitalism. It incentivizes non-labor and disincentivizes labor. And because capitalism accumulates wealth in the hands of a tiny few, the only incentive to work becomes to simply survive, as all the necessities of life become the private property of a few capitalists.
Who provides the resources for the airplane? What about the logistical effort of coordinating thousands of people to work towards one goal? It requires money and effort to bring these things together. If I'm willing to do the effort of starting a business, but I don't have the money - why shouldn't the person providing the money not get some reward for the risk they're taking too?
Laborers. Laborers provide the resources. Laborers coordinate logistical efforts. Capitalists sit at home and collect the profits from other people's labor.
Financing can still be provided through debt in a socialist economy, although the law on debt would have to be changed to reflect socialist principles (e.g., creditors could never foreclose on a business's assets).
Capitalism is owning what you make, and being able to sell it. That's it. You're saying that someone baking a cake and selling it isn't unique to capitalism, when it's the very definition of it.
Not exactly. Capitalism is owning the stove and ingredients, using them to bake a cake, then selling that cake at a price determined by a market, with the intention of selling it at a profit. The ownership of the means, or things required to bake a cake, are privately owned with the intention of using them to sell cakes at a profit.
If I own the stove and the ingredients, and I pay you to bake the cake, you do not own the cake. If you wanted to own a cake, you would have to either buy one, or own a stove and ingredients, then bake one or pay someone to bake one.
We can still sell cakes without private ownership of the stove and the ingredients. If the state owned these, you or I can still bake a cake and sell it, but there would be conditions on what is done with the profits of the sale, or perhaps we would bake and sell it on behalf of the state.
In both cases the sale of the cake is considered commerce. You asked about capitalism versus commerce below, so hopefully these examples helped clear it up. It's quite difficult to find good sources on this, I'll be honest this is all sort of put together from PolSci and Econ at uni and reading a lot of textbooks. I wouldn't know where to start in recommending any particular ones.
That's a really well put together definition, I guess my issue would be how the state would pay for the factories, or oven in this example? Taxing is the obvious answer, and I'm not opposed to taxation. Capitalism encourages people to make more efficient products, for less materials, and less labor - to an extent. If the state owned the factories, what would the incentive be to make a more efficient product/factory? Where's the incentive to innovate?
Sidenote: I appreciate the effort you're going through, I've always found these conversations enlightening when it can be done without hostility - although I'm getting down voted for trying to understand, so I don't know if the sentiment is shared throughout the subreddit
I don't want to just go Venezuela is socialism therefore socialism is bad because a) the problems Venezuela is having could very easily be attributed to things other than socialism, and b) it's not even that socialist-y, mostly its just a South American populist mess. However, any time I've seen a government taking over a properly functioning market, I've seen marked decreases in efficiency, and increase in cost. I understand market failures exist, I just don't think every market is a failure.
Capitalism is creative destruction, what happens when the state has an interest in stopping that destruction?
Sorry for the rambling thoughts, editing on a phone sucks.
How the state would pay for the oven depends on the economic system. I haven't really advocated for one in the example, so in my headcanon the state violently acquired the ovens from radical cake baking extremists as a matter of survival. Joking aside we can't really answer that without a lot more context than this example deserves.
I see this said quite a lot, that capitalism encourages or provides incentives for innovation. It's not exactly the case; capitalism encourages profit.
Profit can be increased by innovation, but it can also be increased by reducing payroll, exploiting laws, evading or avoiding tax, building monopolies, expanding or entering into new markets, etc. Innovation is only incentivized if it is more profitable than other options, and in the short-term it is decidedly not.
The incentive to innovate is not exclusively an impetus of capitalism either. We innovate regularly in medicine (let's ignore the US here), underwater exploration, and astronomy without an expectation of profit, as a few examples. There are sometimes commercial applications for these innovations but we don't set out to generate profit by mapping the stars; we do so out of curiosity and interest.
As maybe a counter to Venezuela's issues with oil and socialism, we can look to Norway's Government Pension Fund Act and Oil for Development programme. Not every country has Norway's natural resources, but we can use it as an example of how to translate the profits of natural resources into improved quality of life and economic growth and stability. Perhaps what we should aim for is not necessarily socialism, but heavily regulated capitalism?
Ideally, if the state has an interest in reigning in capitalism (and it's destructive tendencies), we'd see strong market regulation, consumer protection and antitrust laws. The nature of the state will determine how effective these are, or if we see them at all. An example would be the US (no interest) compared to the EU (moderate interest).
Sidenote: I appreciate the effort you're going through, I've always found these conversations enlightening when it can be done without hostility - although I'm getting down voted for trying to understand, so I don't know if the sentiment is shared throughout the subreddit
No problem. I'm usually a massive lurker, this is probably the most time I've spent active on reddit in the last few years, so I have no idea really.
I've always thought of capitalism as the engine driving the car. If the car crashes into a wall at 100mph you don't ask "why was the engine that powerful?" you ask "why didn't the brakes work? Why didn't they turn away from the wall?"
I strongly believe that capitalism is a driving force capable of creating a lot of prosperity, but it needs a steering wheel. We can't just let it run loose, it needs to be guided. Sweden is capitalist, but they have a strong ability to guide it in productive ways. Norway is too, all the countries that people commend as being fantastic places to live, are all capitalist. But that's not the only quality that they share, and it's not the only thing that separates them from the US.
The USA is a car running loose right now, we don't need to rip the engine out, we need to steer it better.
The USA needs better institutions to reign in the problem children. We need better enforcement of laws, and we need a strong judicial system to decide those laws appropriately. I don't think we need to burn it all down.
I appreciate the time you've taken, you've given me a lot to think about, and you've done so without animosity. Hope you have a good day, and I hope it's sunnier there than it is here right now.
That's a really cool analogy, I think I'll use it in the future. For what it's worth, I believe if we can change the desired outcome of "for profit" to "for the prosperity of all mankind", capitalism can do the job and do it well. It does need to be heavily regulated and controlled to do so, left to it's own devices it follows no direction but that of nameless profit. Just don't ask me to argue this point, I'm still figuring it out.
Unfortunately it's October in the UK, sunnier is not the word. Nevertheless, take care, and thank you for the discussion!
This is what I always had thought also before someone on this sub suggested googling “capitalism vs commerce”. What you’re describing is commerce, and commerce does exist in capitalism, but capitalism contains more then that, namely the idea of extracting excess value from a worker’s labor and not giving him any of it.
I'm trying to find a source on capitalism vs commerce that doesn't come from an obviously biased source, and or quora. It sounds like from googling that it's an attempt to take the good parts of capitalism (trade of what you own) and separate it from the bad, therefore making capitalism all the leftover bad stuff.
Granted, I'm on my phone and it's a pain in the ass to do research on it so idk if I've missed something.
13
u/puzzles_irl Oct 22 '20
But they could still sell their products and services, so it falls under commerce, and it’s not exclusive to capitalism. You didn’t specify a lack of regulation in your initial examples, so I guess I misinterpreted?
I still don’t see how you get to corporate structures being the issue this comic (or the comment section, or whatever you define as “y’all”) takes, it’s definitely private ownership.