Kat Haber

Organizer / Curator, WILD Foundation

This conversation is closed.

Does capitalism continue to serve the needs of people?

Suggest your vision for a replacement, if you believe that is necessary.
Which reforms are needed, if you believe that capitalism does serve.

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    Nov 14 2011: Did capitalism ever serve the need of the people?
    It uses the needs of the people to serve those that accumulate wealth.
    People that can't serve anymore are cast out the game.

    Private property of all kinds should be prohibited and used as common property under a license or consent of the community. In return for this license there has to be some contribution to the community. No taxes anymore and no money. Labor paid as credit contribution.
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      Nov 14 2011: Well said Frans, I couldn't agree more.

      What I'm perplexed about is many people know that capitalism only seeks to serve those in power and are wealthy but yet these same people are still in power. I fail to understand why? Is it loss of hope? Is it habituation, thus fear of change? Are we confused about the alternatives that we seek? I'm not sure what is going on
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        Nov 15 2011: Orlando, I think all reasons you named play a role in this.

        And maybe with it comes the democratic system.
        To be elected for the next term it is more safe to make some adjustments for the short term than to stir things up or project for the long term.
        To it comes a kind of protectionism. Governments rather not look at the global picture for then they discover some unpleasant facts about their own role and responsibility.
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          Nov 16 2011: "it comes a kind of protectionism. Governments rather not look at the global picture for then they discover some unpleasant facts about their own role and responsibility."

          True and what person in power would want to be responsible or have the finger pointed at them when their actions influence the rest of the world. I do not think any individual would want that burden.

          I think it is the democratic system as well. It is so focused on individual rights. There is a term I believe in India (I would take the country that I mentioned with skepticism but I'm sure it has to do with Buddhism, Jainism and Hinduism) called Ahimsa. What is so great about this term is that it is is term that connects everyone together. It stands for nonviolence and the people know how to come together, due to this social value, and have efficient protest because they are all bound to this one value. This is something that many western countries do not have. Especially the democratic ones.

          If your interested: In the early 2000's Coca-Cola established a corporation in India. To make a long story short, they were taking all the water resources and polluting what was available. With the efforts of feminist, they were able to shut Coca-Cola down and did this through this common value that put everyone on the same page. They knew what they were fighting for. This is something that is very much needed.
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        Nov 16 2011: Hi Orlando,
        I saw something about that water pollution when people were taking mutual care. For this you need a real sense of community, a sense of cooperation instead of opposition.

        I think "Ahimsa" is something like the Taoist "Wu Wei".

        The highest virtue is to act without a sense of self
        The highest kindness is to give without a condition
        The highest justice is to see without a preference

        When Tao is lost one must learn the rules of virtue
        When virtue is lost, the rules of kindness
        When kindness is lost, the rules of justice
        When justice is lost, the rules of conduct

        That's where democracy comes in. Laws that regulate and sanctions, that divides into opposite interests and get stuck with compromise.
        • Nov 16 2011: We have to be careful not to disregard individual and minority rights. You can't have a centralized majority dictate what is best for everyone. The world, and most countries are just too big for that. People have unalienable rights that should be voted away by a majority of voters. Borrowing my own words from another conversation:

          Imagine a situation where the white majority dictated the rights of the black minority. This straying from the principles of a Republic is exactly what we fell victim to in the early history of America.
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      Nov 16 2011: No one should be allowed to own a home... That's the most horribly inhuman thing I've ever heard. Private property should be abolished. Wealth re distribution is one thing, an end to private property is just evil. Every generation before us had it... but now it's evil and my generation can't.

      Honestly I think a flip switched in ultra liberals somewhere in the 1980's and they decided that we couldn't afford to build minority people houses, so instead we should just take them away from the majority so it will be fair... Is it really impossible for us to find a way to give every human being a small piece of private property where they can have some god damn privacy? We can't get more work out of people maybe? We can't give poor people construction jobs building their future homes? No one can solve this problem, so fuck home ownership, and privacy. Lets just wander the plains like the noble savage... Do you even read what you right... All private property should be abolished?... The government should be everywhere, telling every one what to do? Governments have such a history of doing right by the people, that will work out great.
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        Nov 17 2011: Hi David,
        I wasn't thinking in my little vision about any government controlling the lives of everyone.
        Instead I rather think of small communities with social control and support that can tune their status by delegates on a higher level of communities. It is the way society was organized in pre Roman times by the Germanic peoples of North Europe.
        You can work your own land as long as you get consent of the community which means that it can be taken away if you neglect your responsibility. Everything then will be in proportion to everything else.
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          Nov 18 2011: I apologize for being so harsh... I really do sometimes hear these arguments, and think that people have let fear of us not fixing climate change, metamorphisize into fear of living wages for working people. Obviously you haven't gone that far, you're just a bit more trusting of groups of people than I am.

          I tend to think that if small independently governed communities, had authority over who could own land, they'd quickly become homogenous, racist, and xenophobic. I think this explains how Europe had 50 different languages, and can't go 20 years without a war despite being prosperous. That is a more controversial, and less proven point though... And I have to accept differences of opinion.

          Also, I already believe, we may be moving in a direction where local governance would be capable of not being homogenous, xenophobic, and racist... We will eventually evolve to that point... I would argue, the south, in America... Certainly isn't ready for that yet... New York could pull that off... LA could pull it off... But even then, I don't thnk you're realizing the civil rights implications of what you're saying... basically, if I work my ass off for 40 years, and I have a child, and I want to leave that child my home... He has to ask societies permission to inherit my house.

          Don't get me wrong, I'm a huge fan of the estate tax, but i'm a fan because it starts at 3 million dollars or so... I think a father or mother should be able to leave their family a house, without anyones permission.
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    Nov 18 2011: http://www.businessweek.com/chapter/degeus.htm

    Very interesting article here, by an oil executive, on the idea of companies as living things - and what this means to the people running them. Lots of implications for how things work, or could work.

    Average lifespan for a company: 12.5 years.
    Average life for a major corporation that has survived the first ten years: 40 years
    One third of Fortune 500 companies in 1970 had vanished by 1983. (I've heard of similar attrition rates for longer periods.)
    But some companies have survived for hundreds of years, as do universities, chirches, and other institutions.

    Basically, the corporation is a failure in evolutionary terms. In it's current form, it's not something we should invest in because the probability is that it will collapse in the near future. By 'invest in' I mean to have any kind of dependency on, including working for one.

    The key changes recommended, based on a study of long-lived major corporations, are:
    1. Sensitivity to environment, responding rather than trying to control/dictate.
    2. Creating a strong sense of community, with a sense of stewardship.
    3. Tolerance for experimentation, outliers, diversity and failure.
    4. Conservative financing, keep away from debt.

    Sounds good to me, but apparently it goes against the accepted practises.
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      Nov 19 2011: Chris you have given me a new word. 'Stewardship'. That is certainly an idea worth exchanging.
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      Jah Sun

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      Nov 19 2011: Very interesting take.

      Corporate personhood must take into account the relative health of said corporations. As with human societies, infant mortality rates say a lot about the general standard of living and ethics of a culture.

      The big question to your 4 points is HOW to get corporations to recognize the need for them to act in sane and rational ways when (as they are currently structured) they can only ever engage in activities that seek to profit their shareholders?

      Until we recognize that corporations are soulless, without compassion, and DO NOT have the public interest or the ecosystem at heart... we can only continue to act as if we are discussing economic systems in the abstract while ignoring the fact that we actually have voracious, powerful beasts roaming the earth who have no qualms about chewing up people, resources, and biospheres to suit their short term interests... a bit like the dinosaurs of old.
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        Nov 19 2011: I read somewhere that if corporations are legally people then they should be put in mental institutions because they are inherently sociopathic.
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          Nov 20 2011: I have said that before.

          If only we could invent some corporate sized thorazine injections...
  • Nov 17 2011: Greetings all -

    There is a system called Time Banking ( TimeBanksUSA ) that holds over 3000 local time banks worldwide - reciprocal sharing systems that build true wealth in communities. This is the " Caring Economy" and the concept goes back to the 80's. It's not taxable according to the IRS ( no guarantee of reciprocity ).

    I just watched the movie " Thrive" and came away very hopeful about our human race. Highly recommend!

    There was an element about Caterpillars eating 3 times their body weight a day, then going to sleep and morphing into Butterflies. Our group is convinced there's and energetic and spiritual transformation in progress, possibly just tipped like when 51% of the flock of birds looks one way and the whole flock changes direction...

    We think this is in play now.

    I didn't know the Federal Reserve was privately owned til a year ago. Without the rampaging greed and obscene accumulation of wealth, and egregious military action, we would've stayed asleep.

    DARPA invented the Internet. Goldman Sachs owns Facebook. A huge percentage of internet traffic flows through Northern Virginia, home of the CIA. Yet majority components of all these populations, corporate and governmental, are in fact good folks like us.

    When the Dutch invented Venture Capital, the British jumped in, not realizing it would be the end of the Empire.

    Maybe a compressed and evolved version of that scenario is playing out now - in front of our eyes.

    I think the actual definition of Armageddon is " lifting of the veil ".

    Watch Thrive!

    May cool heads and warm hearts prevail - Love over Fear.
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      Nov 17 2011: Johnny, thanks for that optimistic viewpoint. I will seek out 'Thrive' so I appreciate that suggestion as well.
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    Nov 15 2011: Kat and Chris, Excellent question and posts. Thank you both. While I believe that their will be violent transitions ahead as Chris refers, I also believe that it will bring about a significant and violent retreat from 'civil' society worldwide. Once 'civility' dissolves worldwide, there will be little to get it back. We are talking end-game times for humans and we now have all of the pieces (from nukes to the terrorism to poverty and hopelessness) all converge in a death spiral. When we crucify and kill those who espouse peace and sharing and reward the CEO's of parasitic capitalism, there is little to instill a sense of hope. At this point it will take a miracle and a spontaneous awakening of consciousness world wide to understand the essence of Gandhi when he said, There is enough for every man's NEED, but not for every man's GREED'. Hopefully we can find the leadership and wisdom to realize we all ride this spaceship earth together, sink or swim.
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    Nov 14 2011: capitalism by definition serves the needs of people. if people's needs are not served, they simply don't buy services of that company anymore. everything we have today is created and produced by capitalism.

    but it can serve us less and less. as the leviathan of the state chokes everything, the free markets are barely able to function, and things are getting uglier each year.
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    Nov 22 2011: I feel that any economic system benefits those who know how to manipulate it best, not those whom it is "intended" to serve
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    Nov 19 2011: The fact is that the evils of man always finds its way through any system that attempts to regulate it.

    Socialism simply does not work in the fact that it makes a strong work ethic seem futile. At the same time, complete laissez faire allows the upper class to practically enslave the lower class and have the middle class be nonexistent.

    However truth be told, theoretically any economic system would work as long as all individuals in a society stop valuing money so much and being so materialistic. The root of all money problems is how we value money in regards to our overall happiness. In short, we need to disregard all our extrinsic values (money, status, etc.) and pay more attention to the much more important intrinsic values (true joy, accomplishment, love, etc.)
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    Nov 17 2011: When you use the phrase How Things Work I am reminded of an incredible children's book: The Way Things Work. I wonder what that artist, David MacCauley, partnered with Rube Goldberg and Thomas Jefferson. What concoction could the 3 of them brink out for capitalism next gen? Oh, and let's toss into the game Charles Darwin, Barbara Marx Hubbard, Warren Buffet, Jane Goodall, and Jesus. Imagine the combined wondering their minds and hearts might produce. What would the new rules of that game be?
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    Nov 16 2011: One more - SOLUTIONS.

    In other comment posts I've to date been a little tough on describing the personality type of politicians as tending to be those questing external power structures, needing attention, immature and not very strategic or considering overall implications. I do actually realise that many in politics are dedicated to improving human society and forming greater harmonious ways of governance - of saving what is left of our planet.

    I have recently been upset a little by the callous and seemingly ignorant or non thinking decisions of some politicians - who instead of acting with legal and ethical integrity - refuse to face up to what is really going down in the world. The situation is too large, they feel overwhelmed by the huge environmental upheaval we now face - and the complete mess and destruction that Capitalist (and actually just greed around current economic wealth status model regardless of its branding) since the industrial revolution especially.

    So we're no different from Greek, Roman or any other Patriarchal civilisation that has collapsed when it has devoured its own. But yes we are - because we are in an age where we have on physical plane advanced our technology to create global interaction and movement. We have raised third dimensional consciousness to the level of global entity (and unity) at least. At the same time we are still behaving like selfish barbaric primitives - and the severity is that our behaviour continues even though we (as society) are now fully aware the dire consequences our actions have on our survival. Through greed destruction of our environment and natural resources in the name of continuing this wonderful model we all pay homage to because we can 'buy' some luxury and comfort (well some of us and we think it looks promising for others too also). Its one thing to be selfish and destructive when ignorant. Its evil to be apathetic when you know the truth.

    E.g - selling uranium in Japan's death wake
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    Nov 16 2011: How is it that, in a culture where money is nearly worshipped, we have no specific class at early ages regarding how to make, spend, give, and invest money? This summer Fabian Han was given a Jefferson Award for his app funded by the New York Stock Exchange to teach young people those skills. Its free and called Oink-a-saurus. http://itunes.apple.com/us/app/oinkasaurus/id398635595?mt=8
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    Nov 16 2011: [2] The enterprise cuts production costs by reducing labour costs to increase profit 'margins'. Currently this happens in two major ways. 1) Technology replacement (automation). 2) Cheap labour market alternatives.

    Capitalism has a negative spiral impact on world economy at local and individual level.

    NEGATIVE SPIRAL 1) In first world economies this has led to almost removal of a 'bottom layer' (i.e. grass roots trade and blue collar labour) - increase in unemployment and less job security.

    NEGATIVE SPIRAL 2) - Diminishing consumer buying 'power' - rise in unemployment leads to greater poverty - less money to spend on consumerism.

    As a first world model capitalism seeks to mitigate (counteract and prolong) the negative spiral of diminishing profits in ways:

    CHEAP THIRD WORLD LABOUR - AND OUTSOURCE MANUFACTURE OF PRODUCTS (where we are now)
    In the sense of globalisation and sustainable development this seems great (apart from domestic loss of jobs). Masses of poor people receiving economic support, jobs and development = poverty alleviation.

    All looks good. BUT - there is a problem. That problem is the next stage of Capitalism AUTOMATION to increase margins and its future impact on current third world population economies.

    NEGATIVE SPIRAL 4) Agricultural land and environmental living 'space' is increasingly acquired and developed - for production (e.g. resource exploitation) and industrialization. Poor people and Earth Indigenous are the first to 'go'. Impelled relocation.

    NEGATIVE SPIRAL 5) Technology replacement with automation.

    This is also another great feature of Capitalism and how it can aid sustainable development - as the paradox of education and knowledge it brings to commons. BUT in a capitalist model - this event - the next phase to come in third world capitalist development will be to lay off the jobs it now pays through automation efficiency.

    At this point Capitalism's eco destructive features outweighs benefits = collapse
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      Nov 16 2011: Yup, eventually we won't need people at all. Everything will be produced by machines, ie capital. Labour will be worthless, unless you happen to be one of those people who builds and takes care of machines. Eventually, even that will be done by machines.

      People who own capital will be OK, they will make ever-increasing profits on their investments.

      Nobody yet has an answer for the question of how people are going to pay for the stuff made by machines. If you don't have a job, and don't own any part of the economy, then you don't have any currency to buy things with. I think this is a new problem the human race has never faced before. What do you do when 99.9% of us are surplus to requirements? Build machines to keep us away from the rich people while we starve?
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    Nov 15 2011: I am fond of working with what we have and within the reality of current circumstances. I think that the best changes are effected by moving a society forward solidly and even incrimentally. (Think of the way a great herd migrates). It also tends to be less violent. Why throw the baby out with the bath water? Thus I think that capitalism is the system we have and that in many ways it works fairly well. We simply need to focus on the parts that can be improved and the ways it is not serving the whole. Even China has adapted its basic system to recognize the drives within people to better their lot through hard work and striving. So ideally I would lke to see each governmental system move incrementally to incorporate the best qualities of the other systems for the benefit of more people in their respective societies.
    The one dramatic and drastic change all societies need to make is to enable their young to have a level playing field. It is the favouritism for the children of the elite and the discrimination against the worthy and brilliant underclasses that ensures that we fail as societies. If we really did give all kids a level playing field, nurturing their health, their education and their opportunities we would continually rejuvinate and balance the insights and potential contribution that can be made by societal leaders in every field. I think this one change could keep us more firmly on track and give all people a greater reason to believe in and hope for their societies.
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      Nov 17 2011: If a tweaking is all that is needed to serve the needs of people,
      could this be a prescription for a more compassionate economy in America? Many developed nations have already moved to this-or is it not possible to sustain this?
      M Maternity/Paternity Leave: Provide paid family leave after a new child comes into the family.
      O Open Flexible Work: Promote jobs that have work hours and career options that allow parents to meet both business and family needs: flexible work hours and locations, part time options and the ability to move in and out of the labor force while raising young children without penalties to wages and benefits.
      T TV We Choose and Other After-School Programs: Ensure safe and educational opportunities for children after the school day such as accessible and affordable afterschool programs, age-appropriate computer games, as well as more educational television options and an independent television rating system, with technology that allows parents to choose appropriate programs for children.
      H Healthcare for All Kids: All children must have quality health care.
      E Excellent Childcare: Quality, affordable childcare should be available to all parents who need it. Childcare providers should be paid at least a living wage and healthcare benefits.
      R Realistic and Fair Wages: Two full-time working parents should be able to earn enough to adequately care for their family. In addition, working mothers must receive equal pay for equal work.
      S Sick Days, Paid: All people should have access to paid sick days.
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        Nov 17 2011: Kat- I totally loved this post.

        Canada has most of these things and we are doing fairly well as a society but we have much to work on even so. Our families need more affordable childcare options but afterschool care is run in many schools by third party providers like the Y. We also need to address the wages for child care workers and more work is needed for living wages for every sector as well as sick days for every sector.
        One of the biggest tactics used by businesses to keep families impoverished is the move to part time or contract work to avoid benefits and this is making life hard for a lot of young couples.
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        Nov 18 2011: I would argue for gender neutral single parent incomes as opposed to two parent incomes... I think that's a civil rights issue we lost in the last few decades... Families have a right to have a dedicated parent... In my humble opinion.
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    Nov 15 2011: No mention of the agency problem - the seperation of ownership and control in large corps.

    The corps are owned by investors, at arms length. So you invest in a fund, and the fund invests in the company with only one mandate - to make money for you. They get bonuses determined by how much money they make for you, so that's all they care about.

    The people running the companies are not the owners. They are paid acccording to complex formulae involving all sorts of factors, which means that they have incentives to do things that you may not like - even though you own the company and are paying the salaries of the people screwing you over.

    I think if we can solve just this problem, then the world will be a much better place.

    A little historical note: I read a while ago that the British East India Company was a successful trading concern for ~150 years under the leadership of people who were personally invested in the business. Trade for mutual benefit was effective and worked pretty well for everyone, until the management incentive structure got in the way. it eventually became more profitable for the people in charge - but not the shareholders - to get into the colonial game instead, and start conquering territory. They were playing with other peoples' money, getting bonuses for short-term gains, at the expense of the long-term business and all stakeholders. From a mutually beneficial relationship, it became an oppressive exploitative disaster culminating in economic failure and escalating conflict. Sound familiar?
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      Nov 15 2011: Is a reboot required or simply a pressing of the enter button for reforming and tweaking the current system? How would the decisions made within corporations need to change. In the largest, most powerful and having greatest impact on the ecosystem of both Earth and national financial systems currently a small ruling elite drives direction, and reaps a handome financial reward for that sage advice. Is an evolution or revolution of this needed?
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        Nov 15 2011: It would be hard to make change with the consent of the powers-that-be. They have too much to lose, and will resist like hell. I suspect it will need a violent revolution.

        But an uninformed protest movement sounds like a bunch of sheep bleating that nobody is taking care of them any more. The Occupy protests are basically people who used to be OK, now complaining that they're not. How do they feel about the hundreds of millions of people in other countries who now enjoy a higher standard of living due to the offshoring of American jobs? Is it good that wealth has moved from the richest sector of the global population to the poorer billions in other countries? Or are they just saying "I want mine" and screw any higher principles?

        Nothing is going to change until the powerful agree to give up something for the benefit of the weaker. It works on all scales, from the very few corporations that control the top 1%, to the 6% of global population that controls 34% of global wealth - that's you in North America.

        This is all just my opinion, of course. I don't really know anything. But I'm a globalist, trying to understand economic forces that are as real and as complex as the weather. It's hard, but the over-simplification in most conversations prevents anyone finding answers.

        Did you read the WSJ article by Nassim taleb I linked to? He's a Wall St insider, who foresaw the banking crisis and made huge profits betting against the experts. His advice is to stop giving bonuses to bankers completely. He talks a lot about shock, risks, etc in his new book. Fascinating stuff, find his Facebook page and download the drafts.

        PS The Chinese, in the Art of War, have a lot to teach us about how to win without violence. Weapons of war are "inauspicious" and a lot less effective than an intelligent campaign of manipulation. The powers on Wall St understand that, which is why they're winning over the protesters.
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          Nov 16 2011: 'But an uninformed protest movement sounds like a bunch of sheep bleating that nobody is taking care of them any more. The Occupy protests are basically people who used to be OK, now complaining that they're not.' This is only the symptom that the system is sick, not the cure.

          I agree that the power barons will not reliquish power without a fight. Perhaps we need to draw up our own list of Ninety Five Theses, our own statute for change and distribute it.

          The first on my list would be a Proportional Representation system of govt.
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    Nov 15 2011: I'm thinking about the things that governments have achieved in my lifetime. I've seen entire countries cease to exist, some have descended into terrible wars. I've seen economically disastrous policy failures. I've seen armies marching off to go and solve someone else's problems in far off places, and coming back with far fewer people. I've seen land laid to waste, natural wonders destroyed, resources squandered. And much much more. All in the name of political expediency.

    Governments suck.

    Unregulated capitalism also sucks. It needs to be kept in check, directed in the right way, no argument there.

    But giving more power to governments is just stupid. Are you really going to rely on those idiots to make better decisions than everyone else? Time Magazine lists Alan Greenspan as third on the list of people to blame for the economic crisis. He was the person in government responsible for ensuring your/our economic wellbeing and he screwed it up massively.

    Is there any rational reason to believe that nobody in government will find a new, original, and spectacular way to screw up with equally disastrous results? On the other hand, is there any rational reason to believe that nobody in any major corporation will find a new, original, and spectacular way to screw up with equally disastrous results?

    The problem here is concentration of power, whether you give it to the government or to one company/cabal, it's still dangerous.

    Dispersing the wealth, through encouragement of smaller-scale capitalism, is the best protection for all of us. Break up the majors that have a strangle-hold on the world's economy, for sure, legislate to protect the environment and recognise the real value of the natural world, absolutely, but don't argue that capitalism is intrinsically bad. That's like saying that evolution is bad because it produced humans.
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      Nov 16 2011: Yes Greenspan was a clown, and a government employee. But the system was sick before he got there. Bush deregulated it to the stage that it has become a free-for-all.

      People are weak when it comes to their petty desires. They are lazy, greedy and short-sighted (present company excepted) whether they are government employees, CEO's or the guy pumping your gas. That is why we need systems, solid systems, well thought out and as full proof and cheat proof as we can make them. The system needs improving, perhaps radically so, but I do not think that ' the moral hazard' or 'the profit motive' or 'the invisible hand' will naturally achieve a sustainable system with all the necessary checks balances and accountablilty.

      I think such a system will be designed by clever, highly educated, empathetic, citizens such as yourselves.
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        Jah Sun

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        Nov 16 2011: The Federal Reserve is not a government agency... not entirely anyway.

        It was created in 1913 with the enactment of the Federal Reserve Act, but it was dreamed up by the private bankers by and large, and is still set up so that private banks get to elect its board. The president can elect the chairman, but its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government.

        100% of its shareholders are private banks. None of its stock is owned by the government. The shareholders are, by law, restricted to a 6% dividend on Fed profits, and it is true that most of the profits does eventually make its way back to the US Treasury department... but its policies (including the key interest rates) are not open to public or governmental revue.

        Take, for example, the March 2008 move by the New York Fed, where they advanced the funds for JPMorgan Chase Bank to buy investment bank Bear Stearns for pennies on the dollar. The deal was particularly controversial because Jamie Dimon, CEO of JPMorgan, sits on the board of the New York Fed.

        Bet you didn't know about that one?

        In fact, the Fed is an alarmingly secretive group.

        Just thought I would mention it.

        Be well Joanne.
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    Nov 15 2011: There seems to be some confusion about what capitalism actually is.

    Some people seem to think that capitalism = huge mega-corps that screw people in the name of profit

    Do these people believe that means of production should be owned by the state, or do they believe that private ownership is OK? Do any farmers have an opinion? Any restaurant owners? Artists? Mechanics? I quite like the idea that these people are all working for themselves, and have a personal investment in contributing to my welfare. After all, if they gouge me, I can go to someone else.

    All of those small business people are engaged in capitalism. So am I. Capitalism allows us to make our own decisions about where to invest our capital, to find opportunities to create wealth. By creating wealth, innovating to solve problems, we make the world richer. If we fail in this mission then we lose money, and have to change our products or services to better serve the needs of our customers. As I'm also a customer, I like the fact that I can get a decent meal at a decent price.

    The standard of food and service in my favourite local restaurant is maintained by competition with other restaurants. Restaurants fail all the time, because they're not as good as the place next door. This is bad for the individuals concerned, but good for me and good for the survivors. The losers can pick themselves up and try again, if they're not totally destroyed by the experience and it's consequences.

    Does anyone really have a problem with capitalism of this kind? I don't. It doesn't mean that we can't offer a better safety net, do something to counteract the tendency for extreme wealth to concentrate in the hands of the winners, or impose rules to ensure that the wider social and environmental consequences are not ignored by people trying to make an easy profit. But these problems are not due to capitalism, they're due to poor governance.

    Does anyone really think that state control is the answer?
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      Nov 15 2011: "American Legislative Exchange Council, aka ALEC. Or perhaps it does not -- because the ploy was to keep ALEC invisible. Funded by big corporations and the oil and chemical-dependent Koch brothers, this secretive shadow government of sorts brings together corporate chieftains and legislators to manufacture bills to rewrite state laws. ALEC bills undermine worker and consumer rights, roll back environmental regulations, privatize education, and deregulate major industries. This clandestine public-private partnership has helped pass stealth legislation across the country, including nearly identical resolutions now legislated in a dozen states to force the EPA to stop regulating carbon emissions." -Kenny Ausubel, Bioneers Founder
      What could balance this influence on American governance?
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    Nov 15 2011: The economy is an ecosystem, like the physical one, it's an emergent complex system. It benefits from diversity, just as the biosphere does. If anyone is free to try something new, solve a problem, adapt to fit a niche, then everyone benefits. Adam Smith's invisible hand is no different from James Lovelocks' Gaia theory. So, for me, a free market is a good thing.

    But one property of this kind of system is that success can create a feedback loop, leading to increased success. The rich get richer, and if you're top of the search engine rankings then you get more links and stay at the top. As a species, we're so successful that we totally dominate the planet - and ultimately everyone loses from this positive reinforcement.

    Disease, parasites, alien invasions, facebook, revolutions, these are all disruptive events acting to harm these self-reinforcing success stories, to the long-term benefit of everyone else. We NEED a diverse flexible ecosytem that permits experimentation, adaption, evolution, danger.

    We're in a situation today where powerful institutions are trying to lock the economic ecosystem down, to maintain the status quo by preventing anything that challenges them. Not only is this bad for everyone, it's virtually impossible.

    But I don't think that replacing it with a paternalistic government will be helpful. Government also tends towards control and stability instead of embracing new ideas. I visited the communist world in the 1980's, saw what happens when some politician decides what people want on their behalf.

    We don't have a free market today. We need one. Free markets are anti-fragile, they get stronger with stress.Postponing the stresses (bailouts, etc) just makes the eventual impact much harder.

    Try this for size: http://www.nytimes.com/2011/11/08/opinion/end-bonuses-for-bankers.html
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      Nov 15 2011: Well Chris, when you described the economy as an ecosystem, you had me listening. It is an attractive idea isn't it. Words, like 'diversity', and 'the biosphere', draw an attractive picture of an economy that is like an intricate organism, pure and in sync with its environment, a bit like a compost heap or a coral reef.....and then I read 'Adam Smith's invisible hand.' and 'Free markets are anti-fragile, they get stronger with stress.Postponing the stresses (bailouts, etc) just makes the eventual impact much harder'.

      These 'stresses' were in reality caused millions of people to lose their homes and livelihoods. These 'stresses' caused hundreds of thousands of new homeless and enormous numbers of people to die because of inadequate or non existant healthcare.

      I am becoming disgusted at this kind of rosy free market rhetoric that seems to consider human hardship as collatoral damage to an otherwise perfect utopian system. I am really disappointed to listen to another person talk about 'the communist world' as if it were an Orwellian hell and the only other alternative to free market bliss.

      Sweden, Denmark, Germany and other countries practice democratic socialism, not communism. Germany has govt protected healthcare, pension plans and it still has unions. It is one of the most sophisticated technological countries on the planet. Their system WORKS . Guess what else? They enjoy a low crime rate, a high standard of literacy, and high voter turnout. Low stats for depression and mental illness. If Berlin had a coastline I would have moved there permanently because it is a great place to live.

      These terms , 'free market', 'capitalism' belong to cold-war rhetoric they have lost their meaning in today's world where sustainability is the only critical point.
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        Nov 15 2011: Actually, I lived in Berlin for three years and it was a marvellous time. It was, and is, also a very competitive economy built on the efforts of small businesses. I know, I was one. Germans don't own their own homes. I know, I lived there. People rent, and if they need a job they move to another city.

        Small businesses start and fail all the time. Life can be hard for the people involved, just as it is hard for the fish on the reef or the animals in the rainforest. Rainforest, after all, is just a polite way of saying jungle. Berlin is and was a jungle, I speak from direct personal experience. There was and is plenty of crime. There were, and continue to be, plenty of business failures. It was easy to get screwed.

        However, I also lived in the USA for several years. Compared to that, Berlin was a paradise for the simple reason that wealth does not accrue to the top echelons quite as easily. Taxation, better access to education, a social security policy that makes it easier to pick yourself up after a disaster, and a strong emphasis on responsible borrowing, all contribute to create an environment which makes it easier to survive failure and try again. It's a jungle with a safety net.

        The USA is effectively one giant farm. The diversity has been slashed and burned to make way for a single species environment that doesn't leave room for anything else. Modern mega-corps ruthlessly crush any non-useful innovation that threatens their dominance. Dominance is maintained by fostering dependence, and all this garbage about losing your homes is a big part of it. Fear of loss creates dependency.

        I worked as a mortgage broker in the USA, lending money to bankrupt people living an unsustainable lifestyle in the mistaken belief that this was the American Dream. Everyone, from borrowers to directors of banks, was in cahoots to maintain the illusion, because nobody wanted to face the reality that excessive state-sponsored consumerism was strangling America.
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          Nov 15 2011: I can't argue with anything you have said there Chris. Yet you seem to think the solution lies with the free market? Is that not the cause of the problem not the solution? The german market place is heavily regulated. (I can't take that invisible hand thing seriously, sorry).
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          Nov 17 2011: Thanks Chris, for the chapter from Black Swan. I have printed it to read tonight. Will come back to you with some comments.
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        Nov 15 2011: When you were working within that broken system as a mortgage broker what did you personally do to expose the illusion? What can be learned from that boom & bust cycle?
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          Nov 15 2011: I did nothing. I wanted the money. Just like my customers, my boss, everyone else. We all wanted the money, and closed our eyes to the fact that it was unsustainable. Everyone was, and is still, borrowing money they can't repay. All in the name of economic growth.

          At that time (2000), the average American was re-mortgaging their home every 18 months, to take out cash to repay other lines of credit. The whole thing was a house of cards, built on the illusion that home ownership = wealth and prices could continue to rise indefinitely.

          Now people are losing their homes. But it's their own fault. It's the fault of everyone participating in the system, not just mine.

          (Actually, I only did the job for six weeks and then ran away in horror.)
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          Nov 15 2011: Chris, the reason that those people were remortgaging was because the interest that they paid on their homes was tax deductible and the interest they paid on other things like credit cards was not. This also impicates government. In Canada our mortage interest is not tax deductible so there is not the same incentive to remortgage.
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          Nov 16 2011: Debra, the interest on home loans was also much less. So the real cost of borrowing was reduced as well as the monthly repayment. As a one-off, to deal with exceptional circumstances, it makes sense to roll all your borrowing into one low-interest loan, for sure. But if you're doing it every 18 months, somethig is wrong.

          But most people I met were carrying massive consumer debt which they had run up partly to buy shit they didn't need - and partly just to pay their living costs. It was perfectly clear that, even with the reduced cost of borrowing, they were still going to struggle to make the repayments. Inevitably, most found themselves borrowing on credit cards again because they simply didn't have enough money coming in to make their mortgage payments.

          Everyone was living beyond their means, and denying the basic economic reality. And at the root was the insane belief that house prices would continue to rise - even though houses were already unaffordable. People with houses relied on continued inflation to provide them with something to borrow against in the future - every 18 months or so, as I said.

          And this was BEFORE someone invented sub-prime mortgages. I only did the work for a few months, and quit because the only way to make money at that time was to "improve" customers' loan applications to help them qualify for the next loan. The industry, assisted by the government, removed that restriction so that everyone could make more money by selling loans to people who obviously couldn't repay them.

          What would have happened if someone in power had said "hang on, this is insane, we're living on debt because our economy is not competitive, and the smart thing is to fix the root cause of the problem, not ignore it?"
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          Nov 17 2011: Joanne, and anyone else who cares ....

          http://www.fooledbyrandomness.com/chapter1.pdf - this is a draft of a new book by Nassim Taleb, who correctly predicted the banking collapse in his book The Black Swan. It deals with the idea of 'fragility' - susceptibility to extreme shocks, and why it's better to create systems that dissipate those shocks instead of letting them build up to be major disasters. (eg bailouts)

          It's not very easy to read, but this article is a bit more accessible and does a good job of explaining why bankers don't need bonuses.

          http://www.nytimes.com/2011/11/08/opinion/end-bonuses-for-bankers.html?_r=1&hp

          As for the environment, Taleb advocates zero emissions. The simple reason is that all emissions have effects and we can't calculate what they will be. If you've heard of the butterfly effect then this makes perfect sense. We can't predict the weather a week in advance, how can we predict the effect of any given level of emissions over decades?
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          Nov 18 2011: Kat, I missed your question about what can be learned from the boom and bust cycle.

          The answer is: nothing!!!

          Why? Because people don't learn, in most cases.

          In 1990, I bought a house during a property bubble. Two years later, I was bankrupt and learned an important lesson. In 2000, I was lending money to people who had obviously forgotten about the last crash.

          I've just found an article from 2005 which predicted a "crunch" in 2008. Amazing, how could he possibly have known? He knew because it's a cycle which comes round every 18 years or so, and it comes round because people forget that it's a cycle. It's that simple.
          http://www.moneyweek.com/investments/property/bust-will-follow-boom---but-when

          The current situation is the direct result of millions of people ignoring the lesson learned over hundreds of years. Everyone borrowed against a rising market, wilfully ignoring the pattern of boom-bust that they were creating. Bankers have a lot to answer for, but so do all the ordinary people who participated in that bubble of self-deception. If you know a crash is coming, you don't buy in to it, and if nobody buys in then the crash is averted. Instead, everyone scrambled to make a profit from it. Everyone.

          If every home-owner simply accepted that rising prices make homes unaffordable, and started treating their home as a place to live instead of as their only asset, then things would be very different.

          Home ownership is a burden, as the Germans know. The myth of home-ownership as the route to security was created by the US government in 1918. The "Own Your Own Home" campaign was launched in an attempt to bring about stability in response to strikes and protests, supported by industry keen to sell more product. Gov't worked with enterprise to invent mortgage products to encourage home-ownership, in the belief it would create stability.

          But economic history tells us that boom-bust is the inevitable result, and still nobody has got the message.
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        Nov 16 2011: Joanne, we seem to keep bumping heads over the meaning of shocks. I mean that small localised problems are normal and healthy for the big picture, but if you try to prevent them then the impact accumulates within the whole system until it becomes unmanageable.

        The recent financial crisis is like driving a car with square wheels. You get this huge bang every quarter-turn, but that's too painful so someone proposes reducing the number of impacts - they postpone the shock by bailing out the banks, exchanging the square wheels for triangular wheels.

        If the wheels were hexagonal, you would have more shocks but they would be smaller. If the wheels were dodecagons, with twelve corners, the shocks would be smaller again but far more common. An icosagon has twenty sides, twenty very minor bumps.

        Those minor bumps are like restaurants closing or other small companies failing, or individual fish on the reef getting eaten by bigger fish. Or individual banks discovering that they've lent too much money to people who can't repay. If they happen all the time, and have little impact, then they make for a reasonably smooth ride, and the ecosystem remains healthy because every loss leaves an opportunity for someone else to do a little better.

        But if you tie all the banks together to create one big banking system, to try and protect everyone against individual failures, all the little bumps come at once. This big shock is the problem. And because it's too big, they've tried to postpone it by transferring the losses to the government, creating a huge debt that is shared amongst the people who couldn't repay the loans in the first place. The problem hasn't gone away, it has just been postponed and will be added to the next shock, making it even worse.

        The McD's analogy is the same. Something will happen to them eventually, one day. And the impact will be huge because they are so big. I didn't mean to imply that would be good, quite the opposite.

        Small shocks good, big shocks bad!
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          Nov 17 2011: Thanks for explaining your point, you have clarified it well, and I appreciate you taking the trouble. Can you recommend a good text on economics? I think it is an area I need to understand more about.

          Please correct me if I am wrong; Regulation creates hexagonal tyres? de regulation creates big square tyres, in other words big ugly monopolies? If so then we were actually on the same page, I have misunderstood you. Apologies.
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          Nov 17 2011: Chris, I am not arguing with much of what you are saying. In fact, on another question I posted an interview with Taleb done on the Charlie Rose show. His current solutions are just the opposite to what is being tried. Rather than inject capital to stabilize the systems he says that the rates should have been driven up and that things should be allowed to collapse as a natural consequence of action. It is a bold plan but everyone appears to be so frightened of another global depression that it does not appear feasible. Comments?
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          Nov 19 2011: Hi Chris, thanks for the Black Swan chapter. It was a lot of words to explain one simple idea. I begin to think, that just as history is written by the victor, so economic theories sometimes seem to be written to justify the practices of those who want carte blanche to claim control. The premis in Black Swan seems to be that shocks are necessary in order for economies to evolve into something better. For me, 'better' would not necessarily mean 'bigger'.

          I too find it hard to imagine a different system, one that would not profit from misery, that is not indifferent to people, one where the environment is of integral importance, but I think a sustainable economic system would have to have a falling population growth. Each economy would have to follow a pattern of equilibrium not growth. Obviously the ramifications of this idea are enormous and far beyond my limited understanding economics to venture into.

          For starters, we need to get used to consuming less. The idea of what is wealth needs to change. So many people today would find this idea, terrifying. It is interesting though, how quickly our perceptions do shift when our cirmcumstances change and the spectrum of what is 'wealth' and what is 'enough' varies immensely between human communities as it is.

          Our idea of the affluence has become so skewed, so screwed up. I am often reminded of the courtly excess of princes and kings, when I hear myself, who like almost everyone else in my country, is rolling in plenty, whining about some small hardship. I mention this not to beat the chest in guilt, but to illustrate how impossible such a shift would be by will alone.

          I do not know how it will happen, but if we do not make it happen, the forces of nature will eventually demand it . I fear before then, we will witness terrible strife and increasing deprivation, not to mention the ruin of our garden of eden.
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        Nov 18 2011: (1/2) Wow, lots of great replies here!

        I found a nice primer on chaos theory for you - http://www.imho.com/grae/chaos/chaos.html

        It introduces the idea behind 'the butterfly effect' which not only makes weather forecasting basically impossible, it also mentions Mandelbrot's discovery that the stock market is governed by the same mathematical principles. He gets a mention on the Wikipedia article about financial markets - http://en.wikipedia.org/wiki/Financial_market#Analysis_of_financial_markets

        ie capital works in the same way as species populations, weather, and other natural systems

        Large investments firms try to take short-range forecasts about prices, using computer software originally written to track turbulence in rocket engines. Nice talk about them here - http://www.ted.com/talks/lang/en/kevin_slavin_how_algorithms_shape_our_world.html

        'Turbulence' is movement of data points in chaotic ways, brokers predict it to make financial transactions that also affect the system in a feedback loop. The faster the process goes, the more unstable the system becomes. Do you know about the flash crash? http://www.ft.com/cms/s/0/d18f3d28-7735-11e0-aed6-00144feabdc0.html#axzz1e0tPyYBn

        Taleb was a market trader, and spotted a systemic failure in the way the 'experts' predict risk. He realised that sudden catastrophic fluctuations are effectively unpredictable and unpreventable - the butterfly effect. Without knowing what was going to happen, or when, there is still a probability of *something* happening in a given time period. The market trusts experts rather than probability, and Taleb bet against the experts for years until he was proven right and made a fortune. He worked with Mandelbrot for several years after that, and correctly identified the systemic risks which led to the banking crisis.

        He did it by treating the market as an emergent complex system that is vulnerable to Black Swan events, and advocates fixing the vulnerability by reforming the system.
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        Nov 18 2011: (2/2) People trade, we have always traded.
        http://www.ted.com/talks/matt_ridley_when_ideas_have_sex.html
        Nice explanation here at 5:12 of how trade works, and at 11:22 "trade is 10x older than farming."

        It's part of what we are. Kids in the playground trade toys and other stuff to get what they want. Military units, in probably the most top-down command organisation possible, trade equipment and resources with each other. There was a black market in the USSR.

        Money is just a medium of exchange for trade, it's a tool, not an end in itself. It's a medium which permits us to convert our spare resources directly into something we want more efficiently than we could through barter. Capitalism, in essence, is the idea that we all exchange our spare resources (time, chickens, knowledge) with each other to get what we want, using money to make the process easy.

        I think we can all agree with this idea, the problem is that capitalism is not really a system. It's a basic principle, and the system exists on top of it. If you see an economy as a system, with every action having an effect that feeds back into the system, and acknowledge that it is inherently chaotic, then we can see that there will always be *some* shocks, Black Swans are inevitable, because of the butterfly effect.

        If you just let blind economic forces run wild, you get inflation, recessions, bubbles, periods of stability, and all the rest of it. They're not new!
        http://en.wikipedia.org/wiki/List_of_economic_crises

        They also occur in the physical world, as plagues, storms, species die-offs, desertification, revolutions, etc. It's all the same, and money, or capitalism, or evolution, is not the root problem. The problem is that we don't accept the reality. We try to build stable systems on a foundation that is fundamentally unstable. All the recent protests are a cry for stability, denying the underlying instability of the natural world.

        It's a jungle out there, whatever system you try is built on chaos.
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        Nov 19 2011: Joanne, I wish I could give you more than one thumbs-up for your last post!

        Just to clarify a couple of points things ....

        The chapter you're reading is not from The Black Swan, which was about how human beings systematically underestimate risk. Taleb basically says "I don't know what's going to happen, and neither does anyone else."

        The new book is about "anti-fragility," and addresses the problem of what to do about Black Swans.

        Much simplified, the basic evolution of ideas is:
        1. The net effect of all the decisions made by all the people in the world act on us as a kind of force, shaping our world. (eg Adam Smith.)
        2. Capital, the means of production of goods and services, is the most powerful agency in the human world, stronger than 'the people'. (eg Marx, Lincoln, Jefferson.)
        3. Economic activity, and crowd behaviour, follow the same mathematical rules as the weather and other natural systems, known as chaos theory. (eg Mandelbrot)
        4. Chaotic systems, comprised of the interactions between different parts of the system, can result in 'emergent behaviour' where the system is 'greater than the sum of its parts.' (eg James Lovelock's Gaia)
        5. Chaotic systems are inherently unpredictable, and nobody knows what's going to happen due to 'sensitive dependence on initial conditions,' aka 'butterfly effects'. (eg Lorenz)
        6. Chaotic systems like economies are inherently uncontrollable, due to butterfly effects. (eg the USSR)
        7. Human beings consistently under-estimate the probability of 'Black Swans' - sudden catastrophic change, which can't be planned for and will have huge impact, in chaotic systems. (eg Taleb)
        8. The only effective strategy we know is to learn how to cope with an unpredictable world. (eg Sir Ken Robinson)
        9. Some things actually benefit from a limited amount of stress, meaning that we should learn to welcome and adapt to Black Swan events instead of seeking to control them. (Seneca, via Taleb.)
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          Nov 19 2011: Thanks Chris, you are becoming my economics guru. I look forward to the book you will write. (is there one?). Thanks for the references, there is plenty that needs to be understood, and I think understanding is the first weapon in the arsenal of change. I am away for a few days and will not be able to participate in this rewarding discussion for a while. Best regards to you all. It has been wonderful to connect with such an enlightened group.
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      Nov 15 2011: What would a "diverse flexible ecosytem that permits experimentation, adaption, evolution, danger" look like? Would it be regulatory or values driven culturally? How could this come into being?
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        Nov 16 2011: Responding to this and to what Joanne said earlier, let me say that the current situation is a failure of the system, it's not the behaviour of a healthy diverse ecosystem.

        On a reef, in a rainforest, in an economy, it's kill or be killed all the time. You look at those healthy natural environements, and you see things eating other things, competing for resources, all the time. That's what nature does. Every plant is competing with other plants for nutrients and sunlight. Every restaurant is competing with every other restaurant for customers and profits. It's a jungle out there.

        The reef, or the rainforest, remains healthy as long as the system remains in dynamic equilibrium. The monkeys don't leave, despite the danger, because on the whole it's still a pretty good place to live. Competition between the plants has resulted in a good food supply, in the same way that competition between restaurants has resulted in better restaurants. The system provides everything we need, because any empty space gets filled by someone or something trying to get on in life.

        In a healthy economic system, people will lose their jobs all the time as inefficient businesses close. And new businesses will appear all the time, creating jobs, trying to compete by offering better food, better something than the competitors. There will always be another opportunity because there is so much variety and opportunity.

        The diversity is lost whenever one "life form" dominates. I have a friend who is closing his restaurant because he can't compete with MacDonalds. His food is better, but he can't match their prices due to them having economies of scale. This is 'better' for customers because food is cheaper, but it allows the dominant company to define what food is, so it's harder to find a decent meal at any price. Meanwhile, chaos is bubbling away in the background. Eventually, something will happen to impact MacD's and everybody will starve due to dependence on one supplier.
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          Nov 16 2011: Chris: I think there we are on a slippery slope Chris, when we compare an economy to a natural system. A perfect free market system cannot be a model of equilibrium, quite the opposite.

          As human beings we do not live naturally at all, we manipulate every part of our life from our reproductive cycle to our life expectency. Most of our morals and actions are the result of a diverse range of strong social influences. The private appetites of such a complex creature make the unintended consequences of our transactions too unpredictable. As we see, time and time again in the real world, market action is a highly destructive force, producing pollution, harming the environment and wrecking societies. That is not to say markets do not have benefits quite obviously they do, I just disagree that they follow a 'Darwinian' style natural law.

          I think it is important to remember that as Dawkins describes in his book on genetics, 'The Blind Watchmaker' the laws of natural selection are totally random. In human markets, they are not random, because we have the human will component.

          When you say 'Eventually, something will happen to impact MacD's and everybody will starve due to dependence on one supplier.' you reflect an argument I have heard again and again, that in the natural cycle, the 'stresses' are part of the process and should be allowed to happen. By that argument the 2008 crash should have been allowed to follow its natural path, downward (back to the stone age) and I have heard people say this openly. You may well agree with that too Chris.

          I always find this argument particularily demoralising because people do not seem to find the damage done, the loss of life, and the hard ship caused, the social destruction as a failure of the system. That issue is what divides us, in my opinion.
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          Nov 17 2011: Chris, you repeatedly compare Free Market with an eco-system.
          An eco-system is a circuit of nutrients, nutrients recycled by organisms within the system.
          The influx that keeps it going is sunlight.
          If money stands for those nutrients and labor for sunlight how do they recycle?
          Partly by taxes and wages but there's a continuing stream of nutrient flowing over the borders escaping tax and accumulate into a mountain of value in form of property of all sorts. That leaked value is partly invested in alms for the poor that produces in their turn products that are sold back were the money was generated.
          By that way one system is hollowed out and the other is hold hostage for they can't develop on their own terms and local balance.

          An eco-system is closed and depends on all participants. If one fails the whole system brakes down.

          Free market equals an eco-system only if it's confined within borders and is set under one rule only. If it plays over borders under different settings its name is exploitation.
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        Nov 16 2011: I heard a good story recently about this.

        A few years ago, an investment company called Societe Generale discovered that one of its employees had been making all kinds of crazy unauthorised trades with their money. They had to sell a huge number of stocks the following day, and when you sell a lot of stock at one time people get suspicious and stop buying. So the price drops, you enter a fire sale, and in this case the company lost US$6billion in one day.

        Suppose that SG were divided into ten smaller companies. If one of those companies had the same problem, and started selling off its investments, you might think the loss would be 1/10 of the previous amount, $600million. But the volume would not be enough to worry anyone, so the price would not drop and the company would not lose money.

        Why does this matter to anyone else? Because the fall in price mean that anyone else who owns that stock is now poorer, on paper. And when prices fall, brokers start speculating, which can lead to further price falls. So your mutual fund is worth less, and healthy companies appear to be unreliable because their stock is falling. So loans get called in and people get laid off.

        And if SG's losses are big enough then SG can fail. If SG fails, all the companies that invested in SG lose a lot of money and risk failure too. Everyone is leaning on everyone else, creating one huge entity that is vulnerable to shock.

        Smaller entities are also vulnerable, sometimes more so, but if they fail there is very little impact on the wider environment. It's just part of the normal cycle, like one fish being eaten on the reef. The system will produce another fish, restaurant, or bank to fill that space and life will go on. In a healthy, diverse, dynamic system, there is capacity to absorb small shocks and little vulnerability to big ones. Currently, we avoid small shocks, but we're massively vulnerable to the occasional big ones.
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    Nov 14 2011: What is needed for a more effective system then, if reform is all that is required?
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      Nov 15 2011: Kat, you might like this video about "plenitude economy" which addresses the core issue - our social values and how they affect our economic priorities.

      http://www.newdream.org/programs/redefining-the-dream/plenitude

      It's not a case of capitalism vs something else, it's a case of how to use the capitalist system more effectively. ie to get a better result.

      The best thing about this video is the point (around 2:20) where she casually says "yes, we'll have to address the cost of benefits, but that's solvable..."

      I love that, she puts the governments role in this firmly in it's place. The government's job is to create an environment in which people can have better lives, and she simply hands them the problem of fixing the legislation so as to enable implementation of her great idea. For me, that's how it should be. People take charge of their own lives, and the government makes it easy for them.

      Most of the problems we face today are solvable, if only the vested interests were not perpetuating them. Juliet Schor is advocating a vision of life that seems more in accord with Jefferson's than modern America. Jefferson hated banks, by the way.
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    Nov 13 2011: I think Capitalism and Democracy just need an upgrade for the 21st Century.

    Capitalism needs a conscience which will ultimately curb the rampant pursuit of profits and consumerism.

    Democracy needs to be less one-size-fits-all.

    I think we're at a place and time in history where this is imminently possible, if not probable.
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    Nov 19 2011: I think the solutions can start to be formulated along the lines of Eileen Workman's http://www.sacredeconomics.com . It's time to focus on what works for all humans on the planet, and not just the super elites. And by that I mean all of us reading this as well as our Lords and Masters on Wall Street and at http://www.db.com/ .
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      Nov 20 2011: Your link is faulty. You mean http://www.sacredeconomics.org

      I will check out what Eileen has written when I reach a suitable break in my lengthy to-read list.

      Thanks for pointing this out.
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    Nov 18 2011: "As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed." Abraham Lincoln

    What have other world leaders said or predicted regarding capitalism?
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    Nov 18 2011: Expanding on "Corporations are people, too!" Really!
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    Nov 18 2011: With greater efficiency & production due to technology, what will those who used to make a living filling those functions provide to the greater good? Could it be argued that if fewer and fewer are needed to produce what is needed, that their job shifts to what? Being healthy, not incarcerated, environmental restoration, global servants?What do they do to provide for their families if 4 day work weeks become the norm? What value is increasing education if there is no productive need for your input? How do the needs of the 7 billion factor into each national plan?
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      Nov 19 2011: Shhh! Elephant in the room!

      It *might* work if you can continue to increase demand for stuff in line with the increased productive capacity. more consumption = more destruction of the environment. Probably not a winning strategy in the long term.

      I am going to speculate that it's theoretically possible for everyone to work fewer and fewer hours as technology increases their productivity. The cost of the goods and services they produce should fall at the same rate, lowering the cost of everything, so that everyone can continue to enjoy the same amount of stuff and also have more free time. The end result could be a 2-3 day working week and a good standard of living.

      Even if theoretically possible, this would take an enormous restructuring of how things work. I doubt it can be achieved without a lot of dislocation, and anyone who has anything to worry about losing would probably resist.
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      Nov 19 2011: What you describe is already happening. In fact, it has been happening for decades.

      Unfortunately, on its own, this process has not led to any Utopian future like what Chris has envisioned... rather, it has led to massive layoffs, sweatshops in 3rd world countries taking over all of the manufacturing & industrial work, and a general destruction of the middle class.

      Don't believe me? Just go to Detroit.

      While the efficiency of production and the leaps in technology should be bringing about a new Renaissance with leisure time and relative luxury for all... and a complete end to starvation and extreme poverty... what we are seeing is unprecedented accumulation of wealth in the hands of the few. We have entire industries that only exist to siphon wealth out of the system without really producing any tangible goods or services.

      If the system is not redesigned along humanitarian and ecologically sound lines, I am afraid what we will see is the rampant destruction of the poor and otherwise "useless" masses.

      The nation state of the 19th & 20th century is not equipped to deal with the trans-national corporations we have today. They have been pawning the governments of the world for a long time now, and with the Citizens United decision, you can only expect this situation to get worse.

      Corporatism has become a vast global illness. And to bring this all back to your main question... No, capitalism does not continue to serve the needs of the people. It has always been a system to serve the needs of a very small number of people... those with the capital. Capitalism serves the capitalists in much the same way that Feudalism served the feudal lords. If you think otherwise, you are simply not paying attention.. or you are shilling for the oligarchs.
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        Nov 19 2011: I agree with this - Unfortunately, on its own, this process has not led to any Utopian future like what Chris has envisioned... rather, it has led to massive layoffs, .... and a general destruction of the middle class.

        But not with this - sweatshops in 3rd world countries taking over all of the manufacturing & industrial work

        This kind of comment makes me really angry.

        The third world sweatshops are full of people who need the work. They're not great places to be, but they're better than starving or living on aid deliveries. They are part of the process by which wealth moves from the rich countries to the poorer ones. I have no sympathy for anyone complaining that people in poor countries are taking jobs from people in richer countries.

        Every time you express resentment and disapproval about the movement of wealth and jobs from the rich to the poor, you are basically saying "screw them, I want mine."

        If this is your opinion, then you are a selfish capitalist. Hiding behind talk of fairness won't work if you are advocating protection of your own tribe at the expense of others. In terms of global wealth, the USA is the rich minority that owns or controls everything. If you're not willing to share the wealth, then you are the enemy of the poor and disadvantaged.

        If you are an unashamed patriot, willing to give your country precedence over everyone else, then don't buy imports. Spend your money on products made in your country, and pay the higher price due to the increased labour costs. If your people are losing their jobs, it's because YOU prefer to buy cheap imports.

        You are the invisible hand, my friend. You can hold people down, or lift people up, but you can't blame others for the way you use your power. I hope you will choose not to force millions out of work in other countries so that the richest nation on Earth can continue to consume more than everyone else.
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          Nov 20 2011: I think you have severely misunderstood me.

          Me, a super-patriot unsympathetic to the needs of the poor? I happen to spend most of my free time doing hydro-philanthropic work around the world. (not to toot my own horn)

          The system as it stands is the reason that 3rd world people are in a position to be exploited and forced into indentured servitude to trans national capital. These people are not nationalists (except when it suits them to appear as such). The profiteers could care less about the US or any other arbitrary divisions of humanity as far as I can tell.

          I forgive you for taking one half of a sentence of mine completely out of context.
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      Nov 19 2011: This conversation: http://www.ted.com/conversations/6863/what_alternatives_are_there_to.html

      Is set up to discuss alternatives to global capitalism. I would be thrilled to hear your input on this question.
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    Nov 18 2011: I have never understood how recovery from massive natural disasters is a net accounting benefit to a community financially. It may generate job in the short term for recovery, but the place takes often decades, if ever, to fully recover its natural value. And externalizing cleanups from environmental toxins seems to be pushing off to the commons what yielded profits to only the private corporations.
  • Nov 18 2011: The situation demands a return to awakened living, living by profound perennial principles, a return to 'The Way,' considering such ideas as: 'One cannot serve both the Reality/God of eternal sustainable Truth-Life-Love-Peace-Unity-Wholeyness while also attempting to serve the god of mammon, i.e, the god of temporal earthly identity, wealth, status, security, 'values,'...for it would be like trying to ride on the backs of two beasts headed in opposite directions.
    A person who has no consideration of a greater innate conscious Source-Essence will by unable to recognize the need to worship anything other than...3rd-dimensional mammon. With this higher innate consciousness activated in one's existence, capitalism is superfluous, unnecessary, a mere tangential concern. Without this higher unifying timeless, non-linear awareness, capitalism and every other formula, system, or B.S. (Belief Structure) will never work, never be fair, balanced, sustainable.
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    Nov 17 2011: Who has yet to add to this conversation? In your networks, which voices do you want to have weigh in?
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    Nov 17 2011: What impact could a new social index for well being have in your region? This from Riane Eisler:
    http://www.partnershipway.org/get-connected/social-wealth-a-new-national-framework-for-caring-economics-and-human-infrastructure
    GDP does not add in the monetary value of “the caring economy”—the unpaid care of households, children, the elderly, and the disabled by family members. She proposes a new economic map that includes these six sectors:
    ƒ Household economy
    ƒ Unpaid community economy
    ƒ Market economy
    ƒ Illegal economy
    ƒ Government economy
    ƒ Natural economy
    Others have also noted that GDP does not take into account the work done within families and communities for free (Rowe 2008). For example in Massachusetts, these goods and services are not counted in the commonwealth’s GDP:
    ƒ
    Residents 16 years and older spent an average of 4.8 hours a day providing unpaid care or supervising those who need care;
    ƒ
    Residents perform 24.9 million hours a day of unpaid care work (the equivalent of 3.1 million full-time workers);
    ƒ
    Valuing unpaid care work at the typical wages for paid care workers, the total value of unpaid care time is $151.6 billion annually.
    ƒ
    Women compose 75 percent of paid care workers and provide 64 percent of all time devoted to unpaid care activities (Albelda, Duffy, and Folbre 2009)

    Still others argue that not only is GDP inadequate as an economic index, it simply fails as a measure of social welfare. GDP does not adequately take into account variables such as the quality of a health care system, the environment, the level of sanitation, and the extent and quality of education (Abdallah et al. 2009; Dipierto and Anoruo 2006).
    GDP does not speak to the quality of life and well-being of individuals, families, & communities

    Can we assume that rational actors would revalue these contributions?
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      Nov 17 2011: Great reference Kat, I especially loved the academic references so thank you.
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      Nov 18 2011: Oh ya, GDP is a horrible economic indicator. It registers Hurricanes, and oil spills as a win. Just so you know... Defending capitalism, as a basic philosophy doesn't mean defending it's modern identity... Just the idea that all people should have an equal right to choose what products they buy, even though sometimes we'll buy stupid crap for a generation. Merit based pay.

      Defending the status quo is unacceptable... but I don't trust the government more than free people as a purchaser of products... and I don't know who else you could trust... Independent regulators? You'd have to pay them so well they can't be bribed, and they'd have to be competent... I think it's easier for the people of the world to fix it's consumer spending habits, than to uproot the whole idea of consumer choice as a whole.

      Also to save capitalism, we'll need to end subsidies to oil companies, raise the estate tax because inherited wealth is a cancer on capitalist economies, and regulate the banking industry like crazy. I just don't think the fundaments of incentive, merit, and choice, built into the concept of capitalism have been replaced by any more valid proven ideal.

      A caring economy, may create a better economic indicator, that shows us that we're number 7 or something... but it won't replace capitalism, as a basic strategy for free people pricing goods and services.
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        Nov 19 2011: David: raise the estate tax because inherited wealth is a cancer on capitalist economies,

        YAY!

        This goes hand-in-hand with equal access to education. Give everyone a fair start, and collect theri chips at the end of the game so they don't give their own kids a massive advantage.

        Rich people's kids are not necessarily smarter or more creative than poor people's. Giving more effective power (money, social advantages, any headstar) to one group makes all of society poorer in the long run because the best brains don't rise to the top. They get blocked by the privileged, or wasted on a life of drudgery.

        Social inequality, big bad!
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      Nov 23 2011: "Gross Domestic Product measures everything EXCEPT that which makes life worthwhile."

      --- Robert Kennedy

      I'm going to assume you saw Nic Marks' talk on The Happy Planet Index... considering you link to it in your introduction.

      The Kingdom Of Bhutan actually uses a Gross National Happiness index to make their decisions. Sad when a remote feudal society in the Himalayas is more progressive than all the democracies of the West together.
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    Nov 17 2011: Is materialsim evidence of dead stuff in a dead universe? What is life like within a living universe? Grounded, direct intimate life engaging life in every welcoming corner? At the foundation what are the implications of this choice? Exploitation and consuming or is a strategy for awakening necessary? Is being taken care of or taking care of at the crux of the matter? Is the American Dream quickly becoming the world's nightmare? How do we wake up and change the dream? Are material objects being replaced with relationships? How does an economy wrap itself around a next step? Is this youth engagement in Occupy and witnessed in the Arab Spring capable of carrying forward a fresh self-organizing system?
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    Nov 16 2011: Is the Occupy movement globally a small shock or a rare big one? What demands are being made that capitalism is not responding to?
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      Nov 16 2011: I think at the moment it's a non-shock. It's not really having an effect, not one that matters.

      Not yet ....
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    Nov 16 2011: So if this is not it, what is? What is the evolution of capitalism?
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      Nov 16 2011: Well to be blunt - we have small chance left to have an 'evolution' as a species let alone with a means of livelihood support. That said many will state I am being pessimistic - but in my reality - I am simply looking at the human condition from a higher metaphysical level - in addition to intellectual and experiential involvement in world cause - I was born with 'super natural' and unfortunately able to predict and warn people of many global and serious events - to no avail. This led to growing with an overburdened sense of responsibility - to have such gifts of clairvoyance, sentience and healing - and have intelligence (seeming) and a love and sensitivity and connectedness to my Mother (Earth) I devoted my adult life to trying to save the world - thinking it my duty to fellow man in my emotional wounding and immaturity. As I grew from my Pollyanna naivety to discover how evil and intentional many people are in much of their behaviour, (and I mean this as a revelation of others consciousness not a judgement) I thought to just focus on my own self realization and then work independently in whatever small way my life delivered toward what I perceived greater harmony.

      If it was just human civilisation - I would have walked away - or taken that final breath when offered on numerous occasions. But its everything - its LIFE - and Earth's life in turn has a role in the greater universe.

      So getting back to the question. The intended evolution of capitalism is the MNC socialist model I describe. But as the last of our natural resources are destroyed the model won't survive either.

      Lets say we can get our act together - usually some calamity forces change - and some of us survive. It will be hard because of the destruction and we will need survivorship skills. The international society model and the use of what has developed in technology is good. Replacing money with another trade system alone will not help. In a transition model - we can
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      Nov 16 2011: look at village level philanthropy - and there are merits in information societies and cyber business in terms of lightening ecological footprint - I mean shifting the values we place for business drivers to other less tangible merits. It means that natural resources lose their societal wealth value and something replaces it - cultural, sustainable, recyclable etc. as all the experts advise.

      In transition build business models that 'feed back' - shift the tax payer burden and state burden of responsibility away from a central governance and instil profit (or other) philanthropy models - where percentage profits go back into local causes - and consumers are able to nominate and vote how these are distributed.

      I'm being brief - I'm saying first we make use of technology and try to move values away from raw commodities - make it more valuable to share or buy products that have low footprint. Second we re-organise the capitalist model and the NGO fundraising model - so that they combine - business profits fund community and community drives how the funding is spent. Three take protection and enforcement to international level and incorporate with the local model - and international exchange and network model.

      That's pretty much what part of my thesis is anyway. But really - I do know we don't have a clean road ahead. We need to stop right now - as the world is under real threat - especially from nuclear waste.
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        Nov 18 2011: I would offer the alternative theory, that a series of great and brilliant men and women could band together to actually solve our problems in any number of ways, the simplest, most individuallistic, and coolest, would be to leave earth before we destroy it, and go terraform something that doesn't yet have life. That's why I tend to fight so hard on the side of individualism. Societies can't solve these problems. Great people who will no longer tolerate society can solve these problems. The people we're driving nuts, with constantly contradictory and irrational arguments. The Tesla's of the world.

        We need to inspire them, and make them our titans, feed them our collective energy, if we want to survive... Of course that's just my opinion... I could be wrong.
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      Nov 17 2011: Do you mean evolution in the pure sense?

      We often use evolution when we should really be talking about intelligent design. We could choose to evolve our economic systems in a direction that is more responsive to our needs, including care for the environment. This is not a free market, it's a managed economy, and it's not really evolution. Evolution is blind, we have eyes and can see where the lemmings are going. We have the power to guide our 'evolution' in better ways.

      Evolution is pure trial and error, survival of the fittest. The internet is the closest thing we have to an unrestricted free market, and it's dominated by a very few major players that have increasing power over how things work, which they use to maintain their own positions.

      It didn't used to be like that, it was once much more diverse. But the fittest triumphed at the expense of everyone else, just as the global banking mega-corp now dominates the financial industry. The aviation industry is dominated by two companies, there is a 7-11 on every corner in my city, cars have displaced most other forms of transport in many of our communities. This is what evolution does when left to its own devices, it produces super-successful giants and it's a winner-takes-all game.

      In the natural world, there have been periods of mass extinctions in the past. There have also been many situations where individual species or populations have failed. And within species or populations, individuals get killed and eaten all the time. But the huge diversity and complexity within the ecosystem means that there is always something else waiting for a chance to profit from the failure of another, and as a result we live(d) in a world that is teeming with life.

      I would rather take my chances in a massively diverse ecosystem than one dominated by a few organisms. Whether it's banks, dinosaurs, or communism, something will happen eventually to hurt them. Better to have alternatives than put all your eggs in one basket.
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        Nov 17 2011: Hi Chris, I want to read the material you sent through to me to understand better where you are coming from, but I think from this post we are more closely aligned than I first though. 'Managed economy, including care for the environment' 'intelligent system design'. Yes. The nordic model is a point to begin from, but is not a silver bullet.

        The problem we have now, is the bull is out of the stall and grazing in the corn, how do we rein in the barons of the world's oligarchies? The four horsemen of the apocalypse and others?

        Even if that is possible, what systems can we advocate for as citizens, or lobby groups?
        Proportional representation? A people's Bank? Community based housing schemes? A ban on industrial scale fishing? A user pays tax on dwindling resources? Restrain the power of banks? Any other ideas? Investment in Education from the roots up?
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          Nov 18 2011: Joanne, I really don't know what the solution is. We're in a world where the oligarchies have been allowed to get enough power that they make the rules. Very hard to persuade them to just stand back and give up their privileged positions.

          Actually, I would guess that the richest of the rich (Bill Gates, Warren Buffet) would accept some redistribution of power. When you're at that level your personal needs are taken care of and you're de facto concerned with the big picture.

          But if you're CEO of a huge corporation, making *only* $10million a year, and your duty is to your shareholders before anything else, then you are committed to preserving the status quo. And those people benefit when they make the right decision, but they don't eat the losses when they get it wrong - agency problem again. They have incentives as well as power to resist change.

          A couple of interesting facts I keep running into:
          - companies merge to enjoy economies of scale which give them an advantage over everyone else, but also become subject to the law of diminishing returns. As they get bigger, they become less profitable in proportion to their capital. They also become less able to respond to changing situations, which makes them more vulnerable to the inevitable disruptions and shocks.
          - companies don't last, their lives are usually a lot shorter than ours, and compared to our civilisations they are shooting stars (see http://www.businessweek.com/chapter/degeus.htm )

          So it seems to me that a cultural shift, a marketing campaign, a meme, could move the emphasis away from agency-led short-lived mega-corps that drown in their own shit. When people stop believing the hype about mergers and integrations and superhuman CEOs, and start looking for more sustainable investment opportunities, the money and talent will move into systems that can take better care of us.
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        Nov 18 2011: I agree... For the most part, I would just tend to suggest that what you're describing is a capitalist economy... One where small businesses rise and fall regularly through free competition. I think where I differ with most people on this issue is that I blame us. I blame me.

        I'm the invisible hand, you're the invisible hand and we all bought a lot of slave products, and corporate crap, and I see a lot of people that want to blame advertising and manipulation, rather than their inabillity to fight it. It's tough to fight the propaghanda machine of corporations and governments in any country, but we have too. I think we need to use the system better, because we can't trust people to regulate it.

        It seems to me, like you think that 100 minds are better for solving a problem than 1. I would suggest that 95 times out of a hundred 100 peolpe will be better at solving a problem. On the other hand, when you have a really complex problem, I think only 1 in one hundred people are even remotely capable of solving the problem. Different people for different fields.

        In every field there are a few people that are considered geniuses... often they're not the most popular or peer reviewed people, but they have an undercurrent of respect in the community. They predict the future... Often these people have already solved our problems, and they're just sitting in a room, angry...

        Solar conentration works... we could power almost everything we own with glass and existing solar tech... We're just not paying people enough to buy it, and not expressing the urgency with which it needs to be distrubuted. Where you don't get much sun, but there's a coast, tidal power works. Where you get a lot of rain, gravity water wheels work. Electric Motorcycles work... These people are out there and they're just waiting for us to spend money on things that work... and they should get rich... So I advocate we spend our money better, while we wait on legislation.
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          Nov 18 2011: David, yes, the problem is us.

          If nobody borrows to buy houses they can't afford then there is no sub-prime. If nobody eats fish, then there is no over-fishing. if nobody drives to work, there is no carbon problem. The system is the aggregate result of all the decisions made by all of us.

          But it's easier to blame 'them,' the bad guys. Instead of acknowledging that we are the invisible hand, it's more convenient to see conspiracies and cabals. Instead of taking responsibility, it's easier to blame government because they didn't take care of us like good parents will prevent their kids from doing anything dangerous.

          What are we? Sheep? You're saying 95% of us are, and you might be right.
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        Nov 25 2011: Randomly got back to to this post, and just wanted to say. I don't think 95% of us are sheep, I just think at best 1%, probably closer to .1%, have both the brilliant ideas we need to lead people out of these problems, and the charisma to get those ideas out there in a way that the, I don't know 50% ish of sheep, will listen to them.

        I think we need to empower those people, and that at its core is the goal of capitalism, to create titans that people respect, who could lead them into the future. We as consumers need to demand our media machine empower these people further, and stop empowering people than no one likes. We also need to buy products from these people as they are created. We need to be better consumers. I think most of the 95% are capable of seeing the right choice and moving towards it, if it's presented fairly...

        I don't think 50 million people are going to "build a concensus" around solving any of our big problems any time soon though. I think that it's going to be 1-5 brilliant crazy people that have been sitting in a windowless room reading books that are going to solve problems. When they do, it's on the influence makers, to nudge the sheep towards that solution. Influence makers, the middle management of culture, teachers, priests, police, celebrities, etc... They need to help explain to people what products need to be purchased to save our economy and world.

        Unfortunately we haven't picked a great crop of those in recent years.
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    Nov 16 2011: 3] There is one more major component to the finite and non sustainability of capitalism described in its phases below. Below I have focussed on 'process' rather than theory and rather than structure.

    The theoretical prediction of Marxism that capitalism might need to be endured and exhausted in order for communism to 'take over' as a global model has also in a sense been realised - or at least we are in the transition period of it.

    This is because of the third structural component of Capitalism and reality check on its philosophy through experiential validation.

    The great principle of 'any many can make it to the top' under Capitalism has proven severely challenged. Ideally this is true. But as soon as the model (and its process) moves away from the SME village or local-intl exchange by small to medium enterprise operators the ideals become unable to fulfilled to the everyday man and woman. At least - in reality only 2 percent of the 6 billion will make it to the top. The rest have to make do underneath and by result a lot of brat pack power struggling goes on to form mini power silos as compensation for missing out.

    Yes the third component is the rise of the Multi National Corporation. This is the new millenia quasi equivalent of a socialist model - employees and agents serving a board instead of a 'state' for the good of the entity - whose primary goal is to make profits - by exploiting new markets and efficiency. Back into the process described below. Yes many citizens make up the communist feel of the enterprise through shareholder investment - but again only an elite minority receive the true profits of the corporation. The rest get the pickings.

    Meanwhile because the beast isn't human and because of its transborder nature - it has powers beyond state - and collectively pressures governments and controls markets, production and wealth. It finances wars, politicians and media. Most, not greedy are happy with pickings

    BUT CAPITALISM DESTROYS LIFE
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      Nov 16 2011: Vivienne... I'm sorry, but most of this is abject nonsense... Your solution is Marxism? You reallize all of the smart, creative, and hardworking people will all start killing themselves when they approach income equallity with morons right? Why on earth would the best and brightest tolerate the slavery of having no distinctions... Also, will any government ever actually distribute resources in a Marxist way? No of course not, marxists in practice want Marxism for everyone but themselves... If they work harder than everyone else to establish this beautiful paradise, they deserve a little more than the average person of course.

      Capitalism is survival of the fittest incarnate. Capitalism is the only thing that is capable of surviving, it doesn't end life. Capitalism doesn't say that everyone can succeed, it says everyone can succeed if they become the best. It says that the government doesn't get to choose who's the best, free consumers get to choose. Any form of planned economy is destined to be planned by people who get old, and whose idease become obselete.

      You forget the positive spiral of capitalism. When corporations become intolerably oppressive, people stop shopping there, or at least we used to. Capitalism is an economic system that trusts people to be adults and make their own decisions... It makes mistakes, but you don't throw the baby out with the bath water. You don't take the decision making process away from people and give it to government... All smart people will be miserable if you give purchasing decisions to a democratic council, because what's smart isn't always popular, and what's popular isn't always smart.

      Democracy is supposed to be a check on capitalism that improves standard of living... and democracy isn't doing it's job because people are lazy citizens. That is not the fault of capitalism however. The basic idea of capitalism is meritocracy decided by the consumer... Consumers made shitty decisions for 30 years.
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        Nov 16 2011: David, Actually its your post that is abject nonsense. Capitalism excels at short term profits at the expense of the environment, a sustainable economy and undermines a stable society as today's occupy protests underscore along with the failing economies world-wide. Capitalism doesn't begin to deal with the externalizations and unintended consequences that follow in its wake. To look just in the rear view mirror regarding Capitalism, Marxism or any other 'ism' is insanity, as the past has little bearing to the future. We have entered a new paradigm where the incomplete analysis of the past will increasingly become due and payable (from environmental, social and economic costs) Whether you want to look at all the ecosystem services and resources which capitalism has exploited in spades without any accounting of the consequences. Perhaps your smart enough to remember Biosphere 2, the human experiment to create an artificial environment in Arizona. They spend over 200 million dollars and couldn't keep in going for 2 years with about a dozen people. Consider for a moment the implications when one extrapolates to 7 Billion?
        What we need now more than ever is to have no externalization or unintended consequence go unaccounted, of which there is no evidence. I suggest you put your effort into holistic life cycle cost analysis instead of being co-opted by isms. It just might serve you better, and us too. Market capitalism has indeed been free, free of responsibility, accountability or liability.
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          Nov 16 2011: Capitalism does not produce externalizations and "unintended" consequences. Corporatism does that. Propaghanda does that... Brand loyalty does that... None of those are functions of capitalism. Capitalism trusts you to be an adult and have brand loyalty to products your researched, and used for long periods of time with success. It doesn't expect that people will have brand loyalty to television advertising alone.

          People not having any self respect, in this so called free society is responsible for the collapse of our economy. People choosing, through freedom of choice, to buy shitty products maded by slaves, and pollute our planet until it's unlivable. But capitalism says that people can take responsibillity for that, as consumers, and change. Anything else suggests that they can't. Any system that doesn't have free markets will inevitably collapse, because good people won't be able to rise to the top, only people best at manipulating regulators.

          Capitalism needs to re emerge and evolve in this country, not die. Survival of the fittest, and meritocracy is the only thing people will ever really want. They will say they want other things, until they live in other things. We no longer have a meritocracy for working people in this country and we need to fix that, but giving purchasing decision to someone other than free people is not the way to go... Giving up the idea that some people are more valuable than others because they produce the goods everyone else consumes, is not a valid option.
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          Nov 16 2011: Also... No other system of finance exists that deals with externalizations, and unintended consequences any better... You can't tear down capitalism before you create a new valid way of making people work hard to become happy.
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      Nov 16 2011: Government can not be trusted to make any better decisions however, especially in a populist democracy.
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    Nov 16 2011: As a model - the short answer to your question is 'no' - it does not have long term sustainability in its current format.

    Why? Although principles of 'any (wo)man' equal can make financial success and prosperity under this model - its basic foundation is economic drivers - Capitalism is to make profits generated from commercial enterprise.

    How? utilising a labour force, technology and 'selling' supplying consumers with a product or service or both.

    Sounds great so far. Sounds like win-win-win - people get jobs, technology and production requirements fuel further enterprises and consumers benefit from wonderful products and services - these days through cutomer centred design - tailored 'to' them rather 'at' them.

    SO WHY WON'T IT WORK LONG TERM?

    BOTTOM LINE - IN CURRENT FORMAT - IT IS NOT SUSTAINABLE - IT IS NOT REGENERATIVE

    Why? As we see with first world economies (many who now hold almost zero population growth) the beast has to keep making profits. Most business lifecyles generally are longer than a two-five year 'sell it' fire sale models. A SME (small to medium startup) will usually need at least two years in the ground to really start churning profits. People, families, partners etc. put in capital and lots of energy to nurture. Large corporations will also (unless merger or acquisition) look to an approximate 2 year 'break even' plan to start seeing return of investment. Accountants more cautious will look for five year profitability (yes there are many variations to this model - but this is the most prevalent).

    So it takes a lot of time and energy to set up and run a business of any size and whether it is physical, web or both. Consumer markets by contrast have become increasingly transient. Customer loyalty of old is replaced by the latest, newest, fastest, cleverest and media popularised or marketed as 'fashionable'.

    By result businesses seek other ways to find profitability - through laying off employees and efficiency ... [continue]
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    Nov 15 2011: As national borders are being threatened, how does a tribal Afghanistan adopt a capitalist democracy or does it or should it while neighboring Iran and the "Stans" evolve in their own way? dxwomen.org/2011/11/07/the-phoenix-of-fragile-states/ How do fragile states evolve? What ought they evolve to? What role do indigenous cultures play in developing nations?
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      Nov 16 2011: Hmmm, I think there are several different questions hidden within the first one.

      On the whole, tribal societies are good at telling people what they should be/do. Roles are defined by tradition, inherited, and only occasionally chosen by free will. Especially for women. For me, this sounds like a bad thing, because it prevents individuals from finding out what they're good at and making the most valuable contribution they can.

      On the other hand, a tribe is basically a family business, and we forget that Afghanistan's historical significance is as a trading centre. It's a trading culture, inherently capitalist. And the tribe takes care of it's own. There is a social safety net and support network.

      Democracy is not essential for a capitalist system. You could have a democratic socialist or communist state, or any other economic system.

      And even if we agreed definitions of tribal culture and capitalist democracy that confirmed they were different, who are we to tell anyone that they should move in one direction or another? We might feel that X is better than Y, but it's undemocratic and anti-capitalist to impose an agenda on others. The whole point of capitalism is that every experiment is permitted, and the successes will propogate. By experiment I mean "let's try it this way," whether it's finding the best way to organise a society or finding the best way to cook a burger. We try something, and if it doesn't work then we try something else.

      My problem with the current mess is that large-scale integration of systems has resuted in there being basically only one way of doing things. When that system faces a problem, which it has, and can't cope, nobody in power is willing to look at alternatives. There is no room in the modern world to tolerate experimentation with other ways of doing things.
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        Nov 16 2011: Chris; So perhaps you are saying you are against prescribed doctrines as social models? would be with you there. I think all these prescribed doctrines are outmoded and obselete. We need new solution based, sustainable systems, that harness the power of the market place, while moderating it and minimising its destructive aspects. For this reason I advocate the Nordic model, but only as a starting point. It has to be adapted and closely tied to environmental sustainability.
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    Nov 15 2011: I just met Arun Ghandi two days ago. I heard his tale of how his parents raised him with great personal responsibility. He inspired many parents to rethink their parenting. How is it possible to witness both the most dire predictions of end times while experiencing massive innovation through the global movement of TEDx events?
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    Nov 15 2011: How would you level the opportunities for youth globally to have education?
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      Nov 15 2011: I would suggest that children be enshrined in international law as our 'most important and vital resource' and be accorded a level of protection and human rights that required that they be fed, given clear water and health care. All mentally healthy human beings should be able to see the justice and humanity of caring for all of our young. What use is knowing all we know about genetics or any other thing in science if we cannot apply the fundamental fact that we really are all one familty and that the kids deserve better.

      I would like to see all children recieve free education but that we change societies fundamentally to realize that kids should also make a fair contribution to their societies. Yes, they shoud most certainly play but they should from their earliest days do some sort of contributory work as well. My own kids had well chosen chores that were appropriate for their age- not to have child labour- but to teach them that they were essential and important parts of the family unit. My three year olds had the chore of sorting the cutlery from the cutlery basket into the cultery draw. Did I need this help? NO! But they got dignity and a sense of importance from this well shaped task which helped them to learn mental skills of matching and sorting.

      Kids in industrial arts should be building useful things for their schools. Rather than one more thing they should know that they improved the lives of their school mates with shelving, sheds to hold equipment and other things. We raise kids who know that we are just diminishing them by 'keeping them busy'. Kids should be able to progress at their own skill levels on computerized international curriculums in math, science and other subjects. All kids should be able to go back and restudy whatever they need to and participate if they are very talented on real international problems.

      Our very best thinking students in every area should have a way to continue on and excell to the benefit of society and the world.
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      Nov 16 2011: Yes Kat, thank you it does resonate for me. Pehaps that is a valuable starting point. Other people have mentioned in other threads where we have discussed this issue, the need to use new terminology, as the old words no longer seem to serve us well and often divide us. In light of that, 'natural capitalism' fits quite well. I would be interested in what some others have to say about that.

      one of the excerpts:

      'a deeper pattern is emerging that is extraordinary.If you ask all of these groups for their principles, frameworks, conventions, models, or declarations, you will find that they do not conflict. This has never happened before.

      [...]These groups believe that self-sufficiency is a human right. They imagine a future where producing the means to kill people is not a business but a crime, where families do not starve, where parents can work, where children are never sold, and where women cannot be impoverished because they choose to be mothers. These groups believe that water and air belong to us all, not to the rich. They believe seeds and life itself cannot be owned or patented by corporations.

      [...]'[...] No one started this world view, no one is in charge of it, and no orthodoxy is restraining it. It is the fastest and most powerful movement in the world today, unrecognizable to most American media outlets because it is not centralized, based on power, or led by white, male, charismatic vertebrates. [...]
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        Nov 16 2011: Count me as 'one of these (groups) people.' This is the vision that I have for the world and one I am commiting the rest of my life to realizing.
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    Nov 15 2011: And what happens to humans who lack education?
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      Nov 16 2011: They believe what the elite tell them, and end up with debts that their great great grandchildren will be resenting in centuries to come.

      Is financial literacy a core part of your school district's curriculum? It wasn't in mine.
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    Nov 15 2011: Employee focused capitalism, is now and always will be the way to go among rational beings. In the simplest sense the basic idea that if I make ten widgets and hour, and you make five, I make more money. As you skill up or develop muscle memory, you catch up... Eventually I age, and if I can't teach widget production, I'll make less than some new young upstart.

    At the same time... Democratic capitalism, with an educated citizenry... So that it's difficult to make money, without doing work. It's difficult to make enough money to never work again... and the minimum amount of work you recieve for a laboring 40 hours a week, is enough to support a spouse, and two children while owning a home...

    Incorporate that into an international minimum wage on imported goods and you should have a stable society, that creates stable middle class jobs wherever it goes... We're actually very close to the perfect system in America, we just need less billionaires, and we need to take the time as citizens to elect competent leaders to implement it.

    Ultimately my financial system would be augmented with an idea I call "salary capitalism", which basically limits yearly income to a lifetime of spending.... probably 20 million dollars a year nowadays for a really nice life that supports a large family. To deal with enormous existing wealth... your kids can't make more than 20 million the year you die, the rest is taxed... We keep raising it, so that it's always a fantastic lifetime salary that every rational human being would be happy with, and we watch the billionairs cry like babies.
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    Nov 15 2011: On reading entries and reflecting further, I think the real problem with all systems is people.

    However, the best part of any system is also people.

    "Might as well face it, life is so complicated" - The Kinks. "Complicated Life" from the album Muswell Hillbillies.
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      Nov 15 2011: Under current business climate, manufacturing in US, an innovating nation, flees to lowest wage/tax nations. What does this dynamic do to the global economy?
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        Nov 16 2011: It transfers wealth (jobs) to the poorest people.

        It doesn't so it in an efficient way, and the benefits are less than they could be, because it creates a "race to the bottom" which rewards countries for denying their citizens the rights which would increase costs.
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        Nov 17 2011: The "shift" in "dynamics" is not about this country or that country, it is a shift from wide-angle focus (nations) to a zoom-in (individuals).

        Currently, everything is having to deal with this - government and bureaucracy, education, private sector and so on.

        It's actually pretty awesome but all the traditionalists are shitting themselves because they don't know any other way.
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      Nov 16 2011: I'd also argue that the circumstances and the values that they brought up in also influences the way in which they act.

      So yes it does come down to individual or group actions but if you create a better environment for these individuals in which consumption, materialism, profit, etc is not the norm or primary concern then these most of what we criticize about capitalism would decrease dramatically.

      Circumstance and the values that come about it really do play a role: There is a difference between the values and environment that the inhabitants of Freetown Christiana have as opposed to the inhabitants of California have (as a whole).
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    Nov 14 2011: I would argue if it ever has served anyone besides the opulent?

    You can mention the rising standard of living it has created but it only created higher standard of living in slave societies which went from cattle slavery to wage slavery (which the U.S. qualifies). Also you should look at the economic system of the soviet union before 1989. They were a second world country that was on the rise economically and this scared many western leaders. So when they decided to implement capitalism into their society(due to western influence), they became a third world country. (this becomes clear when we look solely at how the economic system was before then and not pay too much about what Stalin did). Honestly I think western leaders were much more concerned about the rising economy of the Soviet Union instead of The Gulag and this becomes clear when you look at what Dean Acheson said in 1963: "The goal of the imperial grand strategy is to prevent any challenge to the power, position and prestige of the United States".


    This can be applied to Cuba during the 60's and how Castro was a threat. Arther Schlesinger said something down the lines of "The problem with Castro is the spread of the Castro idea of taking matters into your own hands", which had great appeal to many Latin American countries at the time. In other words what was feared by the U.S. was that communism created a better way of living for people than capitalism did.

    you mentioned alternatives? I think the problem with this is any alternative that is brought up is going to be thought to be too idealistic or absurd. The reason for this is because the educational system and other methods of propaganda have tried to drive such a notion out of our minds. We are taught there there is nothing wrong with the system that we are in and other alternatives are threat to our security and comfort. It is not an imperative for humanity to be living under a system that values massive consumption.
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    Nov 14 2011: Are you familiar with time banks?
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    Nov 14 2011: Multi-national corporations carry financial and political power beyond national governments. What precisely would checks and balances look like? How would they be enforced? Would they be collaboratively crafted with corporations or beyond their influence? Can you give any example of a bridge that accomplishes this currently?
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    Nov 14 2011: How could capitalism capture a conscience?

    Is there argument for larger, unified political systems?

    Or are more local systems required for responsive governing?

    What would any of these specifically look like?
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    Nov 14 2011: Sustainability is infusing itself into corporate boards, multi-national strategic plans, college campuses, NGO competitions for youth, and perennially indigenous cultures. Yet the flow of Earth's largesse is moving toward the few, leaving the many scrambling and millions barely surviving. Is this the best humanity can do for itself?
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    Nov 14 2011: 'Sustainable development ties together concern for the carrying capacity of natural systems with the social challenges facing humanity.' We need more checks and balances, not less. People are under the impression that the ancient sunlight (oil) will last forever yet we can already predict the time when it will be gone. There are other issues, around water, bio diversity, the oceans and air. If all of the worlds economies do not begin to tie consumption tightly to these delicate balances, there will not be a future for the human primate.
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      Nov 14 2011: Joanne,

      I'm glad you mentioned the environment. Not too many people mention how capitalism affects nature and your right the main reason why the environment is affected is because of consumption. Someone used to argue to me that consumption is not the case but that population is. I do not think this is true because most people around the world do not actually consume as much. It is those in the more developed countries that over consumes.

      But it is true, we can create any sort of political, social or economic system that we want but if nature is not protected and the principles of sustainability are not valued, humans can kiss their existence good bye, along with the rest of the biotic communities.
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        Nov 15 2011: Thanks Orlando, that is a perspective I had not considered. I think a lot about over population, but I did not consider that in relation to consumption. It really is the crux of the matter. We are all wealth addicted. If I look at the room around me as I type, it is stacked with a mind boggling amount of stuff, all of which has required energy, the sun's energy, to produce. At every meal we eat like Renaissance kings, with fifty or so different food groups, consuming things out of season that have travelled the globe, just for our pleasure. This is true for even the most humble person in my society.

        We enjoy so much privilege, yet many of us still think we are still 'poor'.
  • Nov 13 2011: Put simply - although it works well enough, its not perfect.. but should it be? The needs that capitalism serves are needs that it imposed by becoming a core part of our society, so we could spend time perfecting this system, but I think we should reexamine this "needs of the people" idea. Are these needs legitimate given that they were fostered by the system they perpetuate? Is it futile to try to redirect these needs?