Posts Tagged ‘Capitalism’

Reasons To Abandon Capitalism

In Uncategorized on October 23, 2008 at 3:13 pm

It is not surprising to watch Sitaram Yechuri trot out the old tired strawman method of making a point.  In this method, you take something that is not representative of an idea, treat it as it it is and then proceed with a demolition job.  In the case of Mr. Yechuri, he takes Wall Street and The Economist as representatives of Capitalism and then proceeds to say that Capitalism has failed.

This is false because Wall Street and The Economist are not representatives of Capitalism.  They are the products of a mixed economy in which freedom exists side-by-side government controls and regulation.

And this is just one of the mistakes that Mr. Yechuri makes, for even granting his premise that “Capitalism” has flaws, it should be remembered that Communism, the ideology he espouses has been a complete failure.  China and India have been able to make progress only by freeing their markets to some degree.  The Soviet Union, the posterboy of Communism, is only a memory printed on old maps.

What then is better, the system that lead the Soviet Union to extinction or the system of free markets which even if it undergoes problems is capable of rising to live another day?

For more on the nature of Capitalism and the financial crisis please read the blogs of Aristotle the Geek and Applying Philosophy To Life.  You might find your time to be well spent.

To The Able

In The Good on October 6, 2008 at 3:13 am

Living in India the past two years I’ve made it a point to read Swaminathan Aiyar’s column in The Times of India every Sunday.  In the same period I’ve also discovered a blog called “Aristotle the Geek.”  Today I have a nit to pick with both.

In his blog ATG writes that capitalism works on trickle-up, not trickle down.  In precise terms, capitalism sees neither “trickle up” nor “trickle up” but trickle to ability and efficiency.

Considering again the case Mr. Aiyar presented in his column, it is possible to see without much ado that profit flowed to people in proportion to the value they added to the raw cotton.  The person who makes the cotton most useful to the person who will use the cotton (i.e. the one who uses the most complex ideas) gains the most.

Consider also what happens to the money once it is in the hands of the mill owners.  They do not keep the money sitting like a stone on the ground.  This money finds itself in the market to be lent to the borrower who can make the most productive use of it.  Once again, it goes to the most able, productive and intelligent.

In the thinking of this blogger, both trickle-up and trickle-down are incorrect theories because they miss the essential, the ethical, part of Capitalism – capital flows to those who most deserve it.  All of Socialism is merely a misguided attempt to deny that Capitalism is a based ultimately on justice.

And the winner is…

In The Good on January 22, 2008 at 9:33 pm

This is an old story but the lesson is one that is still relevant.