I’d say it’s more like disguised feudalism. We’re all peasants for the few kings and queens that have all the money at the top.
I don’t think people actually agree on the definition of capitalism itself, I just looked it up and was a little surprised how definitive it is:
an economic and political system in which a country’s trade and industry are controlled by private owners for profit.
If you asked whether capitalism is a political system, at least in my random polling, 2 out of 9 respondents said No.
That is because it is not a political system. It does not describe where legitimacy is derived from nor how the government should be structured.
Capitalism is an economic system with as little government intervention possible.
Capitalism is an economic system with as little government intervention possible.
Doesn’t the bolded part make it a political system then?
I’d say no. It doesn’t really describe how a political system works other than commenting on the regulation part.
Same as any other economic political system.
You’re just describing a political system.
It is one policy of a larger system.
What do you mean by one policy?
Capitalism influences many areas of government directly.
It’s not just economics. It’s foreign policy, company regulations, individual protections, land ownership rights, etc. It’s an ongoing list. Even cultural rights are directly impacted by Capitalism.
It is one policy of a larger system.
Right, it’s an economic system that directly influences many parts of government.
No it does not because it does not dictate what kind of government should regulate or to what degree.
Lobbiest that work for companies do that constantly because of Capitalism. It’s an entire field of work.
Lobbyists exist because of freedom of assembly and freedom of speech laws. The strongest lobby in the USA without question is the AARP because their voter list is the most likely group of voters and they are nowhere near the largest donors. Anyone talking about lobbying in the context of capitalism is unfamiliar with either concept in any level.
For pete’s sake most capitalist nations do not have lobbying.
Capitalism is not a political system. You can have monarchal capitalist systems, fascist capitalist systems, oligarchic authoritarian capitalist systems, heck plutocratic democratic republics like the USA can be capitalist. Socialism is both political and economic but not all ideologies are both.
fascist capitalist systems
Pedantic man to the rescue! Fascism was a “third way” from “capitalism” and “communism”. Fascism means state control (if not ownership) of “the means of production”.
most socialist systems participated in the capitalist economic system. The USSR, for example, attempted to create the capitalist mode of production that was almost entirely lacking when the revolution overthrew the czarist regime. They had to, according to their marxist theories, in order to develop a proletariat with a revolutionary consciousness. Similarly China was faced with an economic system that was the shambles left over from the long degeneration and colonial exploitation of the ancient regime, and proceeded to attempt to build a modern capitalist economy under the control of the party, as the USSR was doing. In both the USSR (except for the brief period of the NEP) and the initial attempt during Mao’s lifetime, the market exchange was not used to set prices or drive production and planning, but instead top down ‘5 year plans’ were used. They didn’t work well, why is a complicated discussion, they actually might work a lot better now using the vast compute, information and communication tech available. The USSR under Gorbachev attempted to reform both their political and economic systems and collapsed. China looked at that and reformed their economic system, allowing much of the economy to be market based rather than planned, while keeping political control under the party. Their reform has been spectacularly successful in modernizing their economy, so successful that the USA at this point is determined to sabotage their system and, if necessary, destroy them militarily rather than allow them to dominate the global system.
None of that changes that the capitalist system and capitalism have a direct impact on other areas of government.
that is the ideology of classic liberal and neoliberal governments in the history of capitalism, capitalism itself is simply investing ‘money’ (aka capital) to produce commodities that are then exchanged for more money that is then fed right back into the loop to produce even more commodities to make even more money. The term commodity can refer to things that are intangible, like financial instruments - stocks, bonds, derivatives of stocks and bonds, derivatives of derivatives of stocks and bonds etc. Capitalism is the core of the global economic system. It is not an ideology. There are many countries (but fewer than there used to be) that are either socialist or social democracies where capitalism is highly regulated.
The vast majority of those social democracies would describe their systems as mostly capitalistic for example all of Scandinavia refers to their systems as primarily capitalist.
But it does describe the control of resources and to an extent force, which is “political” in addition to economic.
No it does not. It neither describes how resources are allocated nor how force is used. It merely posits less government intrusion in private business actions. It is in no way a political system and can be applied to very different systems.
Government intervention goes the other way: capitalists like intervening into government.
All business likes intervening in policy that is by no means unique to capitalism.
Yes Marx formalized this opinion.
It’s the owners of the land and the means of production that control all of the wealth.
Now it’s the owners of the holding companies who own the owners of all the rest doing the controlling.
Capitalism is now playing 3D chess
Trickle up economics
It’s hardly a trickle either.
Shit, even at a trickle pace…
If I somehow got one single penny from every person on the planet, I’d have about $80,000,000…
Do you have a penny to spare for the cause?.. 😂
you know what’s funny? you still wouldn’t be close to the rich rich people
I know right…
That’s a great idea to lift everyone out of poverty! If we all gave each other a penny we’d all be rich.
I caught myself mid laugh before realizing the reality of that statement.
More like a firehose
A firehose in the sky that sucks the rain back in.
Honestly one of the reasons I fell for a pyramid scheme coming out of high school.
A friend invited me and I went to shit on it and get him out, but the main guy’s whole thing was “everything is a pyramid scheme, at least here you have the chance to build a pyramid beneath you.”
Obviously there were other reasons as old as time, but the argument of “so what, your ‘regular job’ is already a pyramid scheme you can’t win” was pretty rattling to a teenager in 2011.
The difference between a pyramid scheme and a good business is where your money comes from, in a pyramid scheme it comes from the people at the bottom of the pyramid, in a business it comes from selling goods and/or services, that’s not saying I agree with big business, but one is profiting off of legitimate customers, the other is profiting off it’s own “employees”. I nearly got caught into one a few years ago too, until I realized what it was, at that point they had only taken a couple $100 for the interview and sign up stage, i had to block my card for them to never get access again, because even though i didnt complete sign up, thwy kept charging me monthly
What about the stock market? They seem to be pricing companies way higher than they are worth.
Imagine you own a goose that lays golden eggs. It lays one golden egg per year. How much would you sell it for? Probably not one golden egg, but definitely you’d sell if for a million gold eggs. You’d probably settle for maybe 5? 10? 15? Something like that.
Suppose the goose only lays one egg per year now (or none at all!) but it’s still young and most people expect it to start laying four or five or even ten or twenty eggs per year in a few years from now. It’s impossible to tell for sure how many it’ll lay over its life, or when that will happen, or if it will happen at all. NOW how much do you sell it for?
That’s the stock market.
A bunch of investors think a bunch of gooses will start laying a ton more golden eggs soon, and they’re willing to pay big bucks now in exchange for the possibility of that in the future. This isn’t a pyramid scheme or a zero sum game or anything like that. It’s just a prediction of the future which may or may not be correct, and only time will tell.
That’s the description of the very basics of the stock market.
Now do the derivatives, and let’s see why it’s gone to hell.
I don’t want to pay for the full goose right now, I just want to pay for the right to buy the goose later, at a price that’s fixed now. I’ll decide later if I actually want to buy the goose or not.
Alternatively, I’m not sure how much my goose will continue to lay in the future, I’d like to pay for insurance to guarantee me a fixed price to sell the goose later if I want to.
If anything this understates the problem.
True, because it’s also a giant Ponzi scheme. We pick up new debt today to pay off debt from yesterday, and we hope expanding GDP and inflation will always offset the difference.
Is there a difference between a pyramid and a ponzi scheme?
It’s used so interchangeably these days that I’m inclined to say no, but an oversimplication is that a ponzi scheme is always illegal and is more detailed in its mechanics (as named after conman Charles Ponzi). Wheras a pyramid scheme (or more commonly known: MLM) can actually be legal depending on how it’s constructed.
A ponzi scheme involves a conman who scams his customers by taking massive profits from their investors and requires a constant stream of new investors to pay off the old ones. This is fraud.
A pyramid scheme usually involves some type of product and pays huge bonuses to the recruiters at the top for bringing in more people below them from the investment of new people below them. This is taxing uneducated people but can be legal.
TLDR: capitalism is more akin to a pyramid scheme and not at all like a ponzi scheme.
Yes, but most people using the term don’t know their defitition, so knowing the correct definition is of limited usefulness.
Ponzi is for Investments that offer high returns, by marking the principal as gains. Pyramid schemes sell stuff, through a pyramid of salesmen. Each one earns a percentage of the revenue of his underlings and is encouraged to recruit more underlings.
That’s a good question. Amway is perhaps the architype pyramid scheme. They actually do sell products, but primarily to the marks they con into being ‘amway agents’ or whatever they call them. The marks, in addition to buying the shit, also kick back part of the proceeds from any sales up the ladder. A ponzi scheme doesn’t actually do anything with the marks investment money other than use it to pay off the people in on the con.
Like social security?
You’re not forced to take on that debt though, nor is the debt unpayable unless you take on more debt. Some people put themselves into a ponzi-like situation either through poor financial decision making or circumstances so shit that they can’t do any better, but the average person doesn’t need to take out a loan on a freaking pair of nikes or even a car or house. It’s a cultural norm to get a mortgage, but if you do the math it often doesn’t make sense to and isn’t anywhere close to mandatory. At most you could argue that the US government debt works that way, but even that’s iffy and depends on your geopolitical outlook.
I think the point isn’t debt my man,l’m thinking OP means capitalism sells you the “if you work hard and play by the rules you too can be rich” as your buy-in. That’s the scam.
Exactly. I’m thinking of dying for a few years so I can save up enough to get on the property ladder. Just waiting for a decent grave to come up on the outskirts of town where the rents aren’t too high.
It fundamentally is NOT a pyramid scheme. In a pyramid scheme there is no actual product or service of value and simply extracts wealth from the people in lower tiers. Value, or wealth, is simply the byproduct of an equitable transaction between two or more parties.
Except that you’re describing commerce, not capitalism. Capitalism is the idea that the commerce has value, and that one can own the value of the commercial activity. Further, the value of the business is tied to it’s growth.
Further, products and services are never exchanged in an equitable transaction between two parties, because capitalism necessitates a third party, the capitalist. The capitalist must acquire products and services from employees for less than their true value, and then sell them to consumers for more than their true value.
And because capitalism demands growth, one or both of those two margins must continue to expand. This means workers must be pressured to work for less and less, which is why the capitalist opposes social services, universal healthcare, and affordable housing. This also means the capitalism opposes consumer protections, environmental protections, and taxes that provide a functioning society that might interfere with their growth.
Now what happens when every producer and consumer is fighting for the same margins, the same advantages, and the same growth? Then the capitalist seeks new avenues for new capital and new capitalists. Building business on ensuring the growth of business for other capitalists. Selling the idea that you, too, can join us at the top of the pyramid, all the while kicking down ladders they climbed to get there.
So no, the system itself isn’t a pyramid scheme. It’s just an idea that encourages pyramid schemes because it relies on impossible growth, like a cancer eating away at society.
Further, products and services are never exchanged in an equitable transaction between two parties, because capitalism necessitates a third party, the capitalist.
Hang out with small business owners and you’ll find lots of examples of two party exchanges. The closest thing to a third party is when there’s a contract dispute that involves arbitration or a lawsuit.
The capitalist must acquire products and services from employees for less than their true value, and then sell them to consumers for more than their true value.
This isn’t capitalism, this is employment. Employment has been a feature of most economic systems over the past few thousand years. It’s important to ignore Marxist theory on employment and alienation because is relies on cherry picking facts to create bizarre and blatantly false narratives.
This sentence also packs in a misunderstanding of how value is generated in all economic systems, not just capitalism. The migrant worker is an economic staple in most (if not all) societies that engaged in agriculture. Take the Roman economy for example, migrant workers lack any property ownership themselves and so must sell labor for money. In the absence of tools, property and seeds, they are not able to generate anything of value for anyone else. A wealthy Roman farm owner has more land than they can work themselves. Without workers, their land has some value, but much less. When the farmer purchases labor for money, more food is produced than was consumed by both parties over that time period. If an excess of food is not generated, then somebody starves. The same thing holds for McDonalds. McDonalds owns a trademark, a marketing organization and a supply chain; all of which are useless without a restaurant. A franchise owner purchases access to the systems that McDonalds owns in order to create a restaurant. The restaurant is useless without a fry cook. The fry cook operates the kitchen gear in the restaurant in order to produce food for consumers. It’s important to note that without the restaurant, the marketing and the supply chain, the labor of the fry cook is work very little.
And because capitalism demands growth
The demand for growth is not specific to capitalism. Economic systems that don’t exhibit growth either can’t physically support a growing population (with things like food or shelter), or the average standard of living decreases. Both of these situations are difficult to sustain for any political system.
No, fractional reserve banking demands endless growth because debts can’t be paid off with interest since the extra money to pay the interest didn’t initially exist. Therefore, banks have to lend out more money they don’t have so the prior debts can be paid off but in the process they create more debt. But those following loans come with more interest which leads to the insatiable need for more growth in the economy by loaning more money.
Transactions are often not equitable, and most wealth bubbles up to the people on the top tiers.
Markets are not always fair or efficient but that doesn’t mean capitalism is a pyramid scheme. It is still very much the opposite.
Unregulated capitalism places all of the power in the hands of the wealthy. Even with the amount of regulation in place, the last 4 decades has irrefutably proven that. The transfer of wealth from the bottom 95% to the top 5% has has been insane.
The only reason we need so much regulation is because people are garbage and if they can gain something for nothing, they will. You cannot consider the pure idea of capitalism without also considering the reality of human nature, that it is inherently going to create a pyramid scheme like situation where the top transfer power and wealth to themselves in the largest quantities they can, in spite of pesky things like laws and taxes.
Yes that is true, and you can view wealth distribution as pyramid shaped, but that is not what a pyramid scheme means. As noted the system is very good at producing massive amounts of commodities, distributing them all over the planet, and exchanging them for your labor. If capitalism did nothing useful it would have disappeared long ago.
Global south would like a word.
Like every proponent of capitalism ignores the cheap labor and blatant theft of natural resources the rich nations need to make the line go up.
It’s not the virtue of capitalism that makes our lives so luxurious. It’s the suffering of the rest of the world.
I don’t disagree. Although it is still not a pyramid scheme.
So the first developed countries destroyed the environment just to get extra virtual numbers shown somewhere, and the rest, even though they directly or indirectly participated, got pollution, slavery, famine, but that is not a pyramid scheme?
So, a reverse funnel system? 🙂
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This is a bot isn’t it?
To be more specific, fractional-reserve banking system creates this giant pyramid scheme, not capitalism per se.
Please explain, how exactly is fractional-reserve banking a pyramid scheme?
Because it allows banks to lend out money they don’t have and when the banks lobby hard enough to completely remove whats left of the gold standard, the sky’s the limit for lending out money. Creating money out of thin air increases inflation. However, in a weird way it impoverishes the lower classes while inriching the elite class because the latter tends to better connected and therefor closer to the “monetary spigot”. This allows the elite class to buy up everything(land, companies, lobby/bribe governments)from the top down like a game of pacman.
This ought to be interesting
That’s a valid point, though I still wouldn’t call it a pyramid scheme.
No, it is not. It is brutal in many ways. But that it is not. Neither is socialomswor communism.
Pyramid schemes are zero-sum. I steal and gain, you lose. Capitalism and even communism are not zero-sum games. They are net-positive. They involve people making goods and services for others.
Pyramid schemes don’t have to be zero-sum. All you need are assholes at the top trying to suck up as many resources as they can. Imagine the shape that makes.
A hexagon!
They’re zero sum because money is being exchanged, but the person losing money isn’t getting anything in return for the exchange. Someone is just stealing from someone else (one person loses, anotber gains). No matter how many people are added to the scheme the mechanics remain the same.
An economy, be it a capitalist or communist one, involves the exchange of money but in exchange for goods and services. Both parties of the transaction gain from it.
Now, it could be argued that the wrong people gain the most from capitalism. That’s another argument. But the system isn’t zero sum, the way a ponzi scheme or a pyramid scheme is.
To all your guys huffing and puffing, I’m not passing moral judgment (here) about communism or capitalism. I’m just saying that any economic system involving trade is not zero sum the way a Ponzi-scheme is.
Except people are getting fewer goods and services while paying more money. For some, they’re already at starvation wages even when working full-time and they have to dip deeply into credit just to survive.
That’s inflation and everyone is paying more for the same goods.
Yet costs for the masses are increasing beyond the official inflation numbers.
They are increasing at the same rate for everyone it’s that a 2x increase in the cost of gas or eggs isn’t as big when you are wealthy enough to be able to comfortably absorb that increase
You’re not wrong there, but just to provide a more accurate number for what’s currently happening, inflation of the cost of groceries was 11% from 2021 to 2022. It is expected to continue to be high throughout this year with an estimate between 5-10%.
I think you can say is a pyramid scheme in the way you can’t really make money if you aren’t making money for someone upper on the ladder, even if are an independent business owner, you still have loans to pay or equipment that is sold by a corporation.
That’s called trade. If you “trade” with someone and you do not give them something in return for what they gave you then you either robbed them, swindled them or it was a gift. There is no economic system that does not work this way
Everywhere around you, you can see work that need to be done, from streets that need to be fixed or land that could be cultivated, and all those work keep undone, because nobody up the ladder would get money from it.
Fixing the road is a service. People exchange goods and services in trade. This is the basis of every single economy regardless of philosophy.
Generally the idea is that both parties need to benefit from any transaction if it is voluntary.
When you have to eat and the means to feed ourselves is held by few, no transaction is voluntary.
Of course it’s voluntary. You choose what you buy, when you do it, how much and from whom.
If someone held you on gunpoint and told you to buy their product, that would be involuntary.
You can choose what, when, how much, and from whom, but you are still are still forced to do so. Choosing which person puts me at gunpoint doesn’t make it voluntary
You can also feed yourself by growing food or hunting. Neither of those are banned, just more inconvenient and you probably have some other skills to sell and buy food instead
I can only do so on land that I purchased. Or on someone else’s land I purchased the right to do so on
You are forced to buy food, shelter, healthcare, a vehicle (US). You are forced therefore to have a job to pay for these things. Employers know this, and suppress wages with those together, the proverbial gun.
Generally speaking, slavery is also benefitial to both parties, you’re either a slave out you get killed. While technically voluntary (because a slave can still choose stand up to the oppressor, even if it’s guaranteed to fail) we don’t consider slavery voluntary. We can say that in this day and age our work is voluntary, but it’s debatable.
You can look to this year how “voluntary” it is when the Hollywood execs literally said they will wait for the protesters to starve so they’d get back to work. When there’s such a severe power dynamic it becomes almost no different to slavery, because you, individually, can be effectively forced back to work. The only reason Hollywood protests have any chance to have impact is because they collectively oppose the oppression. The power dynamic is being balanced (or dipped in the favor of labor) by sheer number of protestors / workers.
If we take into consideration the destruction of the ecosystems necessary to sustain human life, capitalism is a net-negative.
They draw the box around the part that is a net positive.
The destruction of the Commons is not accounted for.
The impacts outside their box are not accounted for.
This is true but not a necessity of capitalism. Pigouvian can put the destruction of the commons back in that box.
That’s the tragedy of the commons, and you’ll find it’s true for basically every possible societal organization.
the tragedy of the commons was a bit of British aristocrat propaganda to take the land peasants worked…
Before Capitalism Humanity drove mammoths into exctintion, and that was a hunter-gatherer society.
https://www.earth.com/news/humans-drove-woolly-mammoths-to-extinction/
What I mean with this is that the effect of humanity in the environment is an human issue independent to the economic system issue the humans use.
If we consider the USSR and China were/are behind colossal ecological disasters of their own making, for example the near totall loss of the Aral sea or the Three Rivers Dam, we might have to realize it’s industrial nations over consuming resources that is the real problem.
Incredible that you can say that seriously. Human development and civilization causes ecosystem destruction. The particular economic system may affect the specifics of how this happens not whether or not it does.
Capitalism means always looking for more profits. Endless efforts of private owners to expand and increase their profits leads to the perpetual circle of suproduction and overconsumption which destroy ressources and ecosystems.
This particular system is the main reason it’s happening.
Do you honestly think a communist or socialist society which is wealthy would be any healthier for the environment than a capitalist one that is also wealthy?
We have been destroying the planet long before economy was a concept.
A socialist or communist society could be healthier. Not saying it automatically would be. The only people theorizing a sustainable economy are on the (far) left though.
And the last 50 years proved that sustainability is impossible in a capitalist system. It hinders profits, and the basis of capitalism is: always more profits.
The basis of capitalism is the least amount of government intrusion possible.
Well… no. It never was. Even the USA is highly intrusive and protectionnist. Also, state capitalism ? In you other responses you talk about China like it’s not a capitalist country. China is the main example of state capitalism.
I think you are confusing capitalism with something else.
The wikipedia article is a good start if you are interested.
A socialist society would be better for the environment because all the people would starve /s
We weren’t destroying the planet until the industrial revolution.
Yet China is responsible for one of the greatest intentional ecological disasters of the last 50 years.
It isn’t the economic system. It is large entitled industrialized populations that are the issue.
and with a disappointing lack of giant pyramids, no less!
We need more polloman
I would say this about the stock market
And social security
care to expand on that at least a little? i dont follow.
DAE Capitalism bad?
omg me
Yes!
I’ve seen several thought experiments about capitalism, and letting it run to its extreme conclusion.
- Attempt one, with the theoretical best starting conditions, devolved into feudalism
- Attempt two, which assumed people knew how attempt one ended up and where they wanted to do everything they could to prevent that from happening again, concluded towards theocracy, since capitalism ignores religion, which can become a coercive power structure, separate from capitalism or government.
- Attempt three, where everyone knew how the previous two experiments went, did away with money, and replaced it with an economy based on service contracts, evolved into communism.
Sounds like interesting reading, could you please add a link or reference?
More likely viewing. I’ll update the previous post in a minute.
And I’ll have to stress: it’s specifically about anarcho-capitalism, with the explicit removal of any government. You’ll keep hearing far-right conservatives insist that the best way to run the market is to keep the government out of it. Anarcho-capitalsim is that thing’s platonic ideal, no need to wonder about the government being involved if there’s no government involved.
As you’ll see, at best that causes way more problems than a governed system causes. At worst, it creates a load of problems that a governed system prevents.
Thanks for the links!
Most economic systems are just methods for societies to use to distribute stuff. So,etimes one system makes more sense than others. As we are heading for a climactic disaster that will endanger all human life I’d argue we should be moving towards collectivism at all turns which typically means not capitalist type systems.
Literally as soon as a society calls itself communist or socialist it turns into a perfect utopia
It can call itself whatever it likes, doesn’t mean it actually is that thing.
would you sign up to my pyramid scheme if I was a cat?? 🥺
Your honor I assure you, I am not a cat
Yes
We see your handle, bear.
To all the people here ranting about monetary debt: its not an issue. Money isn’t designed to hold value in the long term. It’s a feature, not a bug.
It’s just really unfortunate for those who play the game as if money were an asset. It’s meant for transactions, not for storage.
Yes, but you’re going to find the same thing with Communism.
Too many shitty greedy people at the top, too many plebs with fuck all at the bottom.
And while you may be thinking “I could live on a commune, spend an hour a day growing our own food and have all that time left for whatever else I want”, you’ll quickly find you can’t grow your own 65" OLED television or whatever other comforts you’ve become accustomed to.
The billionaires need reining in, and better distribution of wealth all around the bottom, but capitalism ain’t going anywhere.
Communism isn’t the same as a tech-less agrarian society
Communism doesn’t mean there isn’t commerce, it just means you communally own the means to produce it, and the profits from it
You don’t need a 65" OLED TV because you know it’s bad for the environment.
So are PCs and smartphones, yet here you are.
Yes it’s a hard question how to deal with this. Practically all the consumer goods somehow harm the environment.
We have been consolidating electronics and making them smaller by volume for a couple decades now. Things are getting significantly better at an individual unit level. Reusing and recycling are also good options and should be made more effective. Lowering global populations soon should also help.
How so though? This sounds like a statement that’s meant to be flashy but doesn’t actually hold up. Pyramid schemes are characterized by a) an eventual lack of ability to recruit more people, b) recruitment rather than a product or a service being the driver, and c) a person at the bottom left with nothing, including recourse. Capitalism, even completely free capitalism, doesn’t work like that unless you specifically rig it to do so. That’s called “corruption”.
an eventual lack of ability to recruit more people
Global population growth is slowing and predicted to halt within the next few decades.
The modern economy has always relied on an environment of growth, which will now end. In some ways this resembles a pyramid scheme; in the past anyone making investments in the economy could count on a larger new generation of people coming into the market needing to exchange their labor for those hoarded resources. Since this is no longer going to be the case, new entrants to the market are going to be getting a lot less for their effort than they may have expected based on past trends.
Like half the population of the world are poor, every industry is using behind the doors sweatshops. Essentially slavery. While not a perfect synonym, I think it makes sense
