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James Whitehead

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Is Capitalism compatible with Democracy?

Is the Capitalist economic system really compatible with democracy?

Or do the contradictions within capitalism itself (eg, low wages to increase profitability, yet high earners needed to buy products) create a system in which democracy cannot function successfully?

Could it be argued that a democratic system would function better in a Socialist economy?

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    Feb 9 2012: wasn't there another topic with the exact same title?

    anyway. no, it is not. the essence of capitalism is private ownership, and freedom in how do you use your property. everything has one or at most a limited number of owners, and other people don't have a say in how they use it. it is essentially antidemocratic. democracy, on the other hand, assumes that some things are decided publicly, by many people who does not own the commanded resources.

    there need to be a clear line in society what things are controlled by capitalism and what things are decided democratically. everything falls into one of these areas, but not both.

    one more note. that "contradiction" is nonexistent. it is a shortsighted fallacy of keynesian economics. other economic theories, like the suppy-side or austrian economics deny the notion that "aggregate demand" would be a meaningful factor.

    socialism in theory is compatible with democracy. but we need to point out that never ever in human history socialism was established by majority vote. and also that they were quick to eliminate democracy as soon as they had a chance.
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      Feb 9 2012: Quote:
      "one more note. that "contradiction" is nonexistent. it is a shortsighted fallacy of keynesian economics. other economic theories, like the suppy-side or austrian economics deny the notion that "aggregate demand" would be a meaningful factor."

      Never heard Marx being described as a "shortsighted fallacy"... lol. perhaps it is a fallacy if we consider that most of the 'low wage earners' are in the developing countries whose manufacturing process is run/exploited by Western capitalists, and they "drip" some of the benefits down to their own societies, therefore not provoking recognition of the imbalance.

      I have no idea if this topic has come up before, I am a new member here and couldn't find the debate through searching....... apologies if i have repeated any issues already discussed.... although no two debates can ever be the same ;-)
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        Feb 9 2012: it seems that i overestimated the depth of that argument. keynesianism is shortsighted. marxism is downright ridiculous.
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          Feb 10 2012: so why respond to a question/debate that is of no interest to you? In some way lauding an air of authority in the TED forum? your de facto manner of speech implies that you are in some way "schooling" me on the topic and that the question is not open to discussion: "democracy is......" "capitalism is not....." Are you assuming that there is a straight answer to the question? are you failing to recognise the significance of the works of people like Marx and Keynes? I think so. Whether or not you think its "downright ridiculous", perhaps it would be more constructive to appreciate the benefits of both schools of thought and then provide a counter-argument, rather than scoffing at the notion that the theories have relevance today....... read a book man
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        Feb 10 2012: i came here to talk about democracy and capitalism. so i did, but you didn't even attempted to react to that. instead, you are intent on talking about my remark about a minor point. if you want to talk about this, instead of your original topic, i'm okay with that. here we go.

        the labor market works just like any other market. in a free market economy, producers of a product compete with each other. they try to offer better and cheaper products to outsell the competition. buyers also compete with each other. whoever needs the product more offers higher price, and gets it before other buyers do. this race condition sets the prices so the supply and the demand is in balance. when this happens, the market is called "cleared". there are no excess products, and there is no unserved demand.

        the labor market works similarly. employers compete for workers. workers compete for jobs. the price of labor (that is, the wage) rises or falls until the market is cleared. if the price is too low, new demand will appear in the form of new companies wanting cheap labor. but the amount of labor can not increase, since the number of people is limited. there will be a shortage of workforce. the market solution is rising price, which reduces the demand, and clears the market. the opposite is possible too, if the wages are too high, demand will fall, and there will be unemployment.

        marx has been refuted in the beginning of the 1900's by austrian economists. mises, in 1920, wrote his essay "economic calculation in the socialist commonwealth", and it should be considered the final nail in the coffin of marxism.

        keynes were similarly refuted, the most notable example is henry hazlitt's "the failure of the new economics".
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          Feb 10 2012: yet again, what are you hoping to achieve by reciting a definition of terms to me, spouted no doubt from wikipedia? you express no opinion, merely attempt to explain economic principles of which I am already aware. If i wanted to know the definition of a laboUr market, i would ask the question, "what is a laboUr market?" or simply go on wikipedia like you did.

          And if you think the 1920s was the "end" of Marxism..... its worse than i thought
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        Feb 10 2012: i'm getting lost here. first, your problem was that i don't explain why marxism is totally off base. i explained it, and now your problem is that i used arguments you knew already. what is the problem with that? if you already knew why marxism is wrong, why did you ask? also, it is rather ridiculous to get upset for the detailed explanation. how i am supposed to know what your expertise is? the things i have explained are, sadly, not part of the common knowledge. so being harsh for i took the effort to explain something is ... well, let's say, weird.

        also note that i didn't give definitions to the labor market, i explained how it works, as opposed to what marx claimed. that's the refutation you asked for. marx claimed that wages will be as low as possible, just to replenish the worker's physical powers to continue working, in accordance with the interest of the capitalist. but in reality wages are rising as the marginal productivity of a worker is rising (by increasing the demand for labor).

        the ludicrous claim that i copied anything from anywhere does not deserve a reply.

        and also note that i didn't say marxism would be dead. i said it has been refuted. marxism is not at all dead, and it is quite virulent even today despite being refuted. same for keynesian economics. the refutation is out there for half a century, but it is still everywhere, and is the basis of government policies all over the world.

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