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Daniel Marques

Biomedical Scientist,

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Capitalism is still dominant. Isn't it time we changed to a more enlightened, less greedy system?

The world is ruled by capitalism. Every country is, in one way or the other, a part of the capitalist machine. Debt or credit is the problematic system of Earth today and, if you look into it, you will usually find that most of today's major problems are due to the way we have developed into a capitalist world. Communism as seen today is not what was ever meant by Marx or Engels. A more fair/ equal society (socialistic) was meant for an advanced capitalist society such as the UK. Yet whenever I start asking why we don't consider changing to a more equal society people start throwing around "totalitarianism-tenancies" and "didn't work for Stalin".

I read into it and it's pretty obvious to me why they all failed. But more importantly I realise (as I'm sure many others do) why if worked out democratically and in stages, would not be susceptible to the historical problems of other attempts. We learn from history. Only by educating more of the promises of a new system could we plan to stop hunger and poverty in the world. Too many people have given up on changing capitalism, despite the inherent flaws in the system (boom-bust cycles) which just leads to more poverty, debt and war and the top 1-5% of the rich becoming richer.

Please tell me there are others in the TED community that have similar thoughts. And what could we do to work on a system that could be proposed in the future. Perhaps there's a think tank working on it now?

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    Aug 8 2011: first thing to note: socialism never ever was chosen by people. in the post soviet bloc, state socialisms were forced on the people by the most horrible dictatorships. in the west, the current movement is toward more socialistic states, but the people are reluctant to give up liberties. state socialism tries to sneak in, but the opposition is significant. and will become even more significant, as the state intervention starts to reach the most valued personal areas.

    second thing to note: socialism did not only fail because it was wrongly implemented. one thing they tried very hard is to grow in power, in economy, so they can beat the west. however they have failed in every aspect, even in military power. how could that be? the reason for that is central planning, and nothing else. without the correcting forces of the free market (trial and error), economy can not grow and develop. it was nicely demonstrated by ludwig von mises in 1920, and later by hayek, who got the nobel price for that.

    third thing to note is that free market economists long since identified the cause of the boom-bust cycle, and it is not the market, but the credit expansion. created by incorrectly regulated banks and especially the central bank.

    fourth thing is: despite all the state interventions, and the harm they've done, the poor still getting better and better, and life conditions improve in capitalism. the "poor getting poorer" argument is not factually correct. average, median and even the bottom 10% is richer and richer in the western capitalist economies.

    fifth and final argument: marxian theories are logically fallacious, not to mention factually wrong. i would not recommend to give too much credit to him.
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      Aug 11 2011: I really don't know very much about economy, but I get the impression that a big problem with central banking is that it is too much like planed economy. Is there an alternative?
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        Aug 11 2011: not exactly. the central banks don't really control anything except bank credit expansion. the planning board is the government and its so called welfare programs.

        alternative: surely there is. the alternative to central bank is no central bank. what would prevent us from doing that? we decide how we organize our lives.
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          Aug 11 2011: Well, I didn't mean planed economy to any very high degree, but elements of it. It was the credit expansion I thought of. Having a single entity adjusting the money suply to have the market react to it. But I can't see a better solution, because if every bank was allowed to expand credits at their own will we would sure run into hyperinflation.
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          Aug 14 2011: @ Krisztián....... There is a logical oversight in your exposition I believe (so I am not saying "you are wrong").

          Central banks control government, but do it indirectly. The members of the boards of directors are themselves among the richest capitalists and bankers in the world. They control what the Central Banks do, but they also [perhaps separately] also control who gets elected, who votes which way, and what regulations get enforced. These "powers" are not overtly nor legally given to the Central Banksters, but they are co-opted by the banksters in any case.
    • Aug 13 2011: "marxian theories are logically fallacious, not to mention factually wrong."

      http://online.wsj.com/video/nouriel-roubini-karl-marx-was-right/68EE8F89-EC24-42F8-9B9D-47B510E473B0.html
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          Aug 14 2011: Birdia, I think you're absolutely right about the big picture, and about how ultimately it will be the problem solvers who bring about a better system, better society, better world.
        • Aug 14 2011: Problem is not just the recession. It is the system itself. No matter how good it gets, capitalism is doomed to fail because it feeds on exploitation and consumption. What will happen when there is nothing left to consume or no one left to exploit? One doesn't have to be an economist to realize that the system is self destructive...
          On that video, Roubini says that capitalism is killing itself. He is absolutely right...

          * In order to reduce the costs, more and more workers are getting fired by companies,
          * An army of unemployed people are not consuming because they don't have income,
          * Economy gets worse and since people are not consuming, there is not enough demand.
          * Not enough demand leads to reduction in sales so companies fire more people... Awesome isn't it...

          Oh! and companies are not just this thoughtless and selfish during the recession. They would want to fire everyone if computers or machines can do the work we do. They wouldn't even think that we are actually a customer too.

          Roubini also talks about the inequality of the distribution of wealth. I did some research and saw this report of a Swiss Financial Group.

          According to Credit Suisse's "2010 Global Wealth Report"; the global total wealth estimate is $195 trillion. It also states that 2.4 million people, in the world, are millionaires. ( $1 million and over) Although these people are "0.5%" of the world population, they control $69.2 trillion in assets, which is the "35.6%" of the global wealth.

          The same reports says that 3.03 "billion" people owns only the "4.3%" of the global wealth...

          and some people still thinks capitalism is good...
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          Aug 14 2011: I think Roubini's assessment of the economic situation and about the fate of capitalism is short-sited and unimaginative.

          In the early 1900's here in America, as capitalism was gaining momentum, the dark side of capitalism was revealed: atrocious working conditions and wages, inhumane and unsanitary slaughter houses, etc. etc. etc. "Buyer Beware" summed up how much capitalism had taken hold of American society. Democracy is the weapon we used to "tame" the dark side of capitalism and put in place the necessary regulations.... And that is what, to a large degree, is happening now (or at least Obama is trying to make it happen). The entrepreneurial spirit will prevail.

          Without regulations capitalism can be a monster. I liken it to steroid use. The American economy was an "economy on steroids" during the Bush years. We are now "off the juice" and slowly regaining strength. But it will be a long time before our economic engine ever revs up to what it was when it was on steroids. That is unless we get with the program and enter into the new age of economics that have to do with green, alternative fuels, global markets, etc.

          ...But I beg to differ with your assessment that capitalism is self-destructive. It's actually self-correcting (as Birdia pointed out).
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          Aug 27 2011: This is a fruitful discussion. I think capitalism has the potential to be better but only when people demand that it is better and have the power to do so. I am convinced we are teetering on the brink of it tipping over so that it has no corrective force. Michael Porter, the Harvard prof is leading the way and Bill Gates and Warren Buffet are trying to implement his tactics but they are not taking too much ground as of yet. Too much power has been transferred to corporations which are not designed to do anything but take profit and power into themselves. There is no human conscience operating within these machines which looks out for the common good. How do we take this power back when the whole of that social group has been born and bred to preserve its own position and wealth? What will the mechanism of a better society be? The brutal kings of old thought they ruled by 'divine right' too.
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        • Aug 14 2011: "An economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state."

          As long as the the building blocks of the system are "private owners" who cares about their own "profit" only, the system will always be prone to exploiting people. In order to survive, It has to be a lot more "social"...
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          Aug 14 2011: @ Birdia...... of all the things you wrote, many of which I find objectionable, the most irritating statement was: "The guys who wrecked the system are the guys most qualified to fix it."

          In other words, and I am not hyperbolizing here (am I?), the best people to "fix" the mortgage crisis in the US would be the Hedge Fund Managers who invented the criminal scheme in the first place? Or wait, maybe the best ones to solve the mortgage crisis are the Congresspersons who supported (tacitly or actively) the deregulation of investment banking.

          When the original destructive behavior amounts to criminality, letting the criminals control the court system is not a solution. It is ridiculously naive. It is self destructive. It is seppuku .
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          Aug 14 2011: @ Birdia ..... "An economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state."

          Your definition might be from a respected dictionary, but it is naive, simplistic and not related to what we are discussing. The globalized, monopolized, profit obsessed, impersonal, robotically insensate decisions made by corporations nowdays are unsustainable.

          You confuse (naively) or conflate (deliberately) small businesses, which hire, sell, and produce locally, WITH megalithic, monopolistic, global, super-corporations which have no limits on their impulse to profit. Local business owners live locally, hire locally, produce locally, rent locally, sell locally and are thus a part of the community and subject to its pressures.

          Exxon doesn't care. Not at all. Big Big Difference.
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          Aug 14 2011: You speak as a person of a wealthy and privileged childhood might speak, but I do not accuse you of elitism or insensitivity or simplicity. Exploitation, especially economic (as if there were any other kind that mattered), can look like slavery in the US, casteism in India, apartheid in South Africa, can't it? In those cases, refusing to be exploited by others would get you killed, beaten, crippled, jailed, tortured or separated from your family. But at least you wouldn't have been exploited.

          Doesn't make sense. Not at all. Regardless of the system.
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        Aug 14 2011: please summarize it to me. i got a headache trying to decipher his accent. i'm not native speaker.
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          Aug 29 2011: Sure Birdia, some links. Unfortunately I'm unable to link to Nassim Taleb's TED talk "What will tomorrow bring?", because it was never published by TED. He preaches humility at the wheel of this economic beast. Kind of an antidote to the Enron-type recklessness shown by the FED and the banksters. Unfortunately my broadband is down to dial-up so I can't pick through for a good youtube clip, sorry about that. This maybe?
          http://www.youtube.com/watch?v=mhSRaehWSvY&feature=related

          Harry Makopolos needs to be listened to. I hear the movie is a dog "Chasing Madoff" but the man can see clearly and he is as straight as a die.
          http://www.youtube.com/watch?v=LagkkLz0q_I&feature=channel_video_title

          For a big picture presentation on money and debt, Mike Maloney is looking at fundamentals (and is something I think everybody should see).
          http://www.youtube.com/watch?v=tj2s6vzErqY&feature=channel_video_title

          For daily economic and political commentary I like Chris Greene, his youtube channel Greenewave. Very insightful. He talks a lot about banks, bailouts, Buffet, Bernanke. He makes some huge calls which I think he gets a kick out of. He's been ahead of the curve, so that's what he does. Keeps me sharp. A platform for going forward here:
          http://www.youtube.com/watch?v=Eqy8o5eX_So&feature=channel_video_title

          and perhaps
          http://www.youtube.com/watch?v=BQJsMf8Vth8

          Finally, the Austrian economists. Most of the economic mistakes (as apposed to political malfesance) that are being made can be explained by the difference between Austrian and Keynesian schools of economic thought. Austrian is common sense- you need to save to invest. Keynesian is short-sighted- you can just create credit instead! We are currently witnessing the limits of Keynesian economics.

          Sorry, I don't expect you to watch half of them but you can if you want to know where I am coming from. I apologize for being blunt earlier, your logic is sound regards Jamie Oliver, but please don't trust the banks.
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        Aug 27 2011: Hi Birdia, I have to agree with Renzo and object to your statement "The guys who wrecked the system are the guys most qualified to fix it." These people that you would leave in power (Goldman Sachs et al), either were ignorant enough to not see what was coming or were morally repugnant so as to drive the economy there anyway. From my research the latter seems far more likely. The Fed and the big banks are rotten to the core along with the politicians in their pockets.

        Far better would be to call on the people that predicted where we were headed and were ignored. The whistleblowers, the trends forecasters, the Austrian economists.
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        Aug 28 2011: I had a look at that Goldman Sachs document.

        When reading documents like this I go in thinking what does it hide? This document is not the product of one man, this is the product of a culture- the culture that has got into the political system and everywhere else power is - Goldman Sachs, Merril Lynch, BOA, News Corporation, The Fed, the IMF etc. We see the culture in their actions but not their words. The proponents know which part of it other cultures don’t like (and by other cultures I mean yours), and so they will try to gloss over them.

        It is presented as follows:
        “At its core, contingent capital is a security that recapitalizes a troubled financial firm without recourse to taxpayer funds. In doing so, it can contain the fallout from a single bank failure and potentially the follow-on failures that can spiral into a systemic crisis. While the underlying recapitalization function of contingent capital is relatively straightforward, “why,”“when” and “how” it operates can vary substantially.”

        They are promising they can create a security (remember the morgage-backed ones?) that won’t cost Americans a thing. Unfortunately they can’t pay these "IOU"s and it will be taxpayers footing the bill. Apparently bailouts don’t cost Americans. Of course, this works much like a bailout by expanding credit (printing money).

        “At its core, contingent capital is simply a security that recapitalizes a troubled financial firm.”

        It sounds like a little tool that makes debts vanish, or as they like to say; “absorb losses”. “A new entity” gets to choose who gets to make their debts to vanish, while other banks get to trade in their debts for these ones. Its like another barrier for anybody but their mates to get bailouts. They were given billions of dollars of taxpayer money and now they’re asking for more.
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          Aug 28 2011: The "Troubled Assets Bailout" was in the amount of $300 billion, give or take. To date, approximately $150 billion has been paid back, with more payback expected.
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        Aug 29 2011: But Jim, TARP is just a small part of the cash out-flow. In the first (partial) audit of the Fed a couple of months ago there was $16 trillion in secret Fed loans made to banks all over the world at zero% interest between December 2007 and June 2011. Goldman Sachs received 814 billion dollars while Federal Reserve also donated $2.5 trillion to Citigroup, and $2.04 trillion to Morgan Stanley.

        http://infinitesque.net/articles/2011/bailout/

        You can also read about it on Sen. Bernie Sanders' website or the GAO audit itself. If Ron Paul and Alan Grayson hadn't added an amendment to the Dodd-Frank bill last year we wouldn't have found out. As it is, we get incomplete information two years late.

        http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3
        "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."
    • Aug 13 2011: Krisztian- Maybe in Hungary the poor are getting richer, but in the major western countries, the poor are getting poorer and the majority of wealth is getting concentrated with a very small percentage of the population. The biggest problem with economical statistics is that they use consumer indexes, wages and property data to base their positions. This doen't take into account the large number of disadvantaged and disillusioned persons who have gone off grid. The American and Canadian governments have been bragging about their unemployment rates, but these numbers are completely bogus, because they only count jobs that file taxes. High paying jobs have been out-sourced to third world countries; decent paying, secure public service jobs have been contracted out to fly by night, minimum wage contractors; middle class debt load is the highest it has ever been. If things are better over here I haven't seen any sign of it.
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        Aug 14 2011: show me any statistics proving that point. i'm not aware that the life standards in the US were falling in any social group. (except of course those who lost their jobs, but that's not our current topic.) i challenge you to compare your life to that of ten years ago, in terms of stuff, not dollars. i doubt you are in worse shape today.

        i would also call your attention to the fact that the current halt in economic development is a temporary thing, and will be solved either this or that way. the US will return to the path or progress again.
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          Aug 28 2011: My life as compared to ten years ago is better.
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      Aug 16 2011: I do not think it is valid to say that "socialism never ever was chosen by people". Primitive people (hunter gatherers) lived communally, sharing food, child care, resource access, defense, hunting etc. And some more modern groups such as the Amish, Shakers, hippies, 'intentional communities' etc have chosen freely to encapsulate themselves in sequestered communities where resource sharing was the rule.
      Even the idea that one strong man does not exert a "right" when he beats a weaker man and steals his goods for no reason but greed, is ancient and entrenched in the earliest codes of law. That is how judicial systems came into being. So we recognize at a fundamental level that strength does not confer privilege, per se, for any purpose that strength choses to pursue. Monopolistic capitalism is not the same entity as entrepreneurism. Insufficiently regulated capitalism is a Godzilla monster jumping up and down in a little plastic Tokyo movie set, eating skyscrapers and kicking over apartment buildings. Over and over again, discussants in this topic make the same mistake by confusing the two. It is not just here that there is confusion. The US Supreme Court last year declared that "money = (free)speech" and any corporation can legally contribute any amount of free speech (= money) to ANY political campaign. So now the Godzilla monster is jumping up and down inside the control booth of the American political system. Whatever democracy there was here, is now shrinking rapidly. An so it always seems with unregulated 'capitalism'.
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        Aug 16 2011: the idea of primitive communities is actually a marxian mistake. historians do not agree with that. we don't really know how cavemen lived, but there are indications that they had a very clear idea about private property.

        from here, i can't follow you. "monopolistic capitalism" is an oxymoron, free capitalism is not monopolistic. entrepreneurism is a non-word. regulation does not seem to do us any good, and i claim that the dire problems in capitalism are consequences of state interventions. money = free speech is a notion that does not make any goddamn sense. if the supreme court decided that way, it is yet another sign that we don't need the supreme court, nor any other state provided brainless political organization, disconnected from reality. especially in the era of the internet. in the US, democracy is rather high level, and people are lamenting about it because other people vote "incorrectly". sorry, in a democracy, people might vote not to your taste. deal with it.
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          Aug 16 2011: @ Krisztián - regarding
          1) "money = free speech is a notion that does not make any goddamn sense"
          2) "in the US, democracy is rather high level, and people are lamenting about it because other people vote 'incorrectly'"

          1) Excuse me for abbreviating. In January 2010 the US Supreme Court ruled in "Citizens United vs. Federal Election Commission" that limitation of political contributions is tantamount to limitation of free speech. Free speech is guaranteed in the (US) Constitution. Therefore from that point on, no limitations on the amount, source or recipient of political contributions will be allowed. (money = speech). This effectively allows, for example, the People's Republic of China, to set up and fund a political action committee in the US and contribute unlimited funds to the election of a favored candidate. "Goddamn sense" in this instance is what the US Supreme Court says it is, since they assumed the right hundreds of years ago to rule on the legality of anything - anything.
          2) Democracy in the US is overrated, misunderstood and as abused as a red headed step child. I apparently mistakenly thought you at least had experience living here. I lament the demise of democracy because corporate interests have suborned the 'vote' by bribery, legal actions, misinformation and bad information, not because informed competent voters disagree with me. Multiple instances of fraudulent vote counting are documented (which actually secured the election of THE candidate), and the US Supreme Court appointed George Bush president (which is not anywhere listed in the powers assigned to the Court, nor is there any precedent in law). These are not consistent with anyone's definition of democracy, not even yours I suspect.
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          Aug 16 2011: @ Krisztián

          I don't want to debate historic communities. At all.

          You wrote: "i can't follow you. "monopolistic capitalism" is an oxymoron"
          And likewise I do not understand what you mean here by oxymoron. For me, all capitalism is by its nature, monopolistic (motivated solely by profit), since it does not ever seek to allow competition and will always attempt to eradicate it (to make more and more profit). You, on the other hand, magically believe that there will ALWAYS BE competition... History has multiple examples of monopolies being broken up (to restore competition) by reasonable and democratic governments.
          However, "free"capitalism has NOT to my best information EVER existed anywhere on planet Earth. So this is becoming theoretical, like the first topic (historical communities).
          Entrepreneurism (entrepreneur, enterpriser) is small scale capitalism: local and integrated into the community, 'mom and pop' operations, small business. Crédit Suisse, Exxon, GE, and the like are not entrepreneurial and their assets are so spread out as to prevent any chance of complete collapse, which is always a threat to small businesses. It may be a neologism, but it is comprehensible (outside of your framework perhaps but still comprehensible).
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        Aug 16 2011: oh boy. this conversation is turning into a direction i don't like. "equals to" relation is very different than "part of". and "money" is very different than "contribution". the cited court decision is that contribution is a *form* of free speech. you interpret it as money equals free speech. you need to be much much more thorough and careful when formulating and interpreting arguments.

        i'm fed up with that argument that democracy is not in effect because ... and here comes some elusive, symbolic talk. i hear that here too, always from people who happen to disagree with the current establishment, and tries to cover up their own failure to understand why things went wrong. in the era of the internet, it is simply a serious case of bs to say that money controls information. the fact is, stupidity controls information. fox news might be shameful, but also the people who watch it.
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          Aug 16 2011: Oh I see. Sorry to have bothered you with my opinions.
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          Aug 27 2011: You can quibble over money vs contribution but its just rhetoric. The concept in question is whether bribery is a justified means of influence.

          "it is simply a serious case of bs to say that money controls information". Are you kidding me? Do we live on the same planet? Are you blind to the fact that Americans are being lied to relentlessly by mainstream media? Do you really think Fox is alone? They all toe the party line.
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        Aug 16 2011: and yet again, you mix words in the worst possible way. "one track minded" does not equal "monopolistic". the word monopoly has a well defined meaning. either learn it, or stop using it. state is a monopoly. free market capitalism makes it very hard for monopolies to form. in fact, the very few near-monopolies produced by the market do not show any signs of being a monopoly. however, state created monopolies are indeed that bad. profit motive is very very different. profit motive means we want to employ resources in an effective manner, that is, produce more from less. i can't see the problem with that mindset.

        the fact that you can't comprehend large scale enterprises does not stop them being enterprises. many times we saw large corporations fail, and small ones take over. it happens all the time. size does not protect you in any way from failure.
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          Aug 16 2011: Oh I see. Sorry to have bothered you with my opinions.
          After I get a decent education, maybe we can talk again.

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