Why so much hate for Capitalism?

Question

Really, I'm astounded at how much hate there is for capitalism out there. All other economic systems have been largely discredited... and capitalism has been able to create the greatest amount of wealth for the greatest number of people the world has ever known... Capitalism has allowed the average person to live a decent life in places like the USA, UK, Australia, New Zeland, Hong Kong, Chile, Japan, Germany, and other capitalist nations... Socialism has made it so there is a small class of elites with great wealth, and the vast majority of the populas is destitute... look at North Korea, the Soviet Union, Zimbabwe, China, India (both are moving toward capitalism and thus improving, yet look at their history)... In nearly every case you'll find the more government intervention in economics there is, the less well off the average people are, yet everywhere I go people hate capitalism! Why is this?

ervin_parker -

I would like to point out that while scams do occur in capitalist societies (after all in a $13 trillion economy there are bound to be a few cheaters), and Enron is a perfect example of this, these scams are the exception. Compair this to the wide spread corruption and cronyism you see in centrally planned economies.. case in point, take a look at Haiti, and how impoverished it is... this is due in large part because of the economic mis-management of Jean-Claude Duvalier, and his father François Duvalier, who raped their nation's wealth! I'll take a thousand Enrons over state sanctioned scams like you see in Socialist nations!

parasenorita -

So what if CEOs make a lot of money? That dosn't take anything away from you...

FOR THE LAST TIME, THE ECONOMY IS NOT A PIE!

The glaring ignorance of how the economy works shown by the liberals today is pathetic. Despite the vast wealth of America, caused entirely by the power of unregulated free markets, and liberty to pursue that wealth, Democrats continue to use their populist rhetoric to put down the what they do not understand... namely that the economy is not a pie!

The most outrageous and glaring example of this rhetoric took place during the Democrat response to President Bush's State of the Union Address. This speech was delivered by Jim Webb, the Democrat Senator from Virginia. In his speech Webb remarked:

When one looks at the health of our economy, it’s almost as if we are living in two different countries. Some say that things have never been better. The stock market is at an all-time high, and so are corporate profits. But these benefits are not being fairly shared. When I graduated from college, the average corporate CEO made 20 times what the average worker did; today, it’s nearly 400 times. In other words, it takes the average worker more than a year to make the money that his or her boss makes in one day. [1]

Now this is some of the most ignorant, populist, dribble ever spoken by an elected official. It looks to be egalitarian, but it is actually simply stupid. It betrays the fact that Democrats simply do not understand that the economy is not a closed system. The fact that some people in our country have great wealth does not mean that others have less... just the opposite. When rich people have great wealth, everyone has more wealth. How can this be? It is because rich people have money through creation. They didn't find a bunch of money and stick it under their bed, they made money by creating businesses and conversely jobs. Then when they make huge sums of money, they take that money and invest it in other instruments that create business, and even more jobs.

In the movie Wall Street the villain Gordon Gekko makes the comment that "money cannot be created or destroyed", and furthermore that the market is a "zero-sum game". It is no surprise that such a lack of knowledge should come out of Hollywood, the American bastion of socialism, but I digress. While any economist worth their salt could tell you that these comments are absolutely ignorant, and can explain that through the deposit credit multiplier effect clearly money is created every day, it appears that Democrats view economics to be just that, a zero-sum game! In the minds of these fools, they think that if someone makes $200 million, then there must necessarily be $200 million less for everyone else to share. That is why the Democrats are constantly talking about money as "slices of pie". You hear them every day saying things like, "forget our slice of the pie, we don't even get the crumbs". These sorts of comments are pure stupidity!

Beyond the ignorance of how money is created, there is a real good reason for income inequality in America... it may be harsh to admit it, but some people are worth more than others. That is not to say that anybody has value as a person more than anybody else, but the skills that some people have do have more value than the skills of others. For instance, Michael Jordan is considered by most to be the greatest basketball player who ever lived. He had skills that few others could match. Because he is a rare occurrence, he earned millions because of his superior abilities. Other more average basketball players earn far less than MJ, because they simply do not have the skills that can command the salary that the skills MJ can command. Simple, right?

Despite this, it is jealousy that drives such comments. The average janitor's skills cannot command the same pay rate that a neurosurgeon can, but politicians use the jealousy the janitor feels toward those who earn more than them to promote their agenda. Markets are able to efficiently maintain employment in high skilled careers by paying those with high skills higher wages. In a free market those with fewer skills, or who are incompetent, end up earning less. Attempting to equalize the pay rate between people will only serve to distort the labor market. What incentive does a person have to spend years in school and training, if they could earn just as much cleaning toilets with no training? Furthermore, markets highly compensate those who innovate, and create successful businesses. Therefore those people like Bill Gates, who innovate, and create new businesses, and drive the economy are entitled to their billions.

This bellyaching about "the rich getting richer, and the poor getting poorer" is simply ludicrous. People in a free market earn what they are entitled to. Attempting to use jealousy to further political position is simply wrong, and moreover harmful. The government needs to stay away from trying to influence wages, or to promote financial equality. In a free society, everyone is free to choose what kind of life they choose to live, and free to earn what their skills can earn them. I say we need to keep America a free society.

[1] - http://bryanscrafford.wordpress.com/2007/01/24/video-and-transcript-of-jim-we...

leef -

Are you nuts? Most Americans aren't that well off? Compaired to what? The vast majority of "poor" people in America have luxuries unherd of in many parts of the world. Most "poor" people in America have homes, cable television, cell phones, automobiles, refrigerators, and numerous other convienences that real poor people in socalist places, such as North Korea, and Zimbabwe would kill for. Yes, there are some homeless people in America, but the absolute majority of them are in that situation because either they are mentally ill, or because they have distroyed their brains with drugs... saying that most people in America aren't that bad off is an insult to those who suffer real poverty.

1848 -

When did I discribe anyone or anything as "undesirables"?

scottdman2003 -

Yes, but how does jelousey explain the hate for capitalism that comes from the people in the United States?

Answer 1

Two words in Paraseniorita's post say it all: "compared to."

People are better off the freer the economy - comparisons to cherry-picked years at the peak of an interest-rate cycle notwithstanding. That has always been the case, the data show it, I've posted the data that show it, I'll do it again.

But we're better off to different degrees. What Churchill said rang true: with capitalism you get unequally shared plenty, and with collectivism you get equally shared misery. The tradeoff is - do you want to be better off than you are, knowing that CEOs are MUCH better off? Or do you want to be worse off than you are, but find comfort in CEO pay being slashed?

But most of us are not macroeconomists. Most people don't realize the tradeoff. Most people take the benefits of capitalism for granted - - - - - the low unemployment, low inflation, and low interest rates, along with increasing economic mobility (in the absolute sense) and life-improving inventions coming to market seemingly on a monthly basis, we think that just happens regardless of how high or low tax rates, which interfere with the flow of capital, are. We assume that these things would have happened if income tax rates and tariffs had been left unchanged since the late 1970s. We notice the RELATIVE differences. Also, because of the mobility, there's a lot more new money, we rub elbows across classes a lot more because the classes are more fluid - - the KPMG senior CPA who grew up the son of a coalminer sees what the Partner who is a 3rd generation CPA has that he himself doesn't have, long before he reflects on the fact that his Dad would never have even known that that lifestyle existed or the fact that under 1930s-1970s-era economic policies he would probably have never escaped the coal mines.

This is exacerbated by the media's constant manipulation of the numbers - comparing what a 20-something grad student makes tending bar at night to what 40-somethings who went through the same grad school program 20 years ago now make as research scientists, and tell you that's the difference between white and skilled blue collar workers, who actually make somewhere in between.

Answer 2

The vast majority in the US is not that well off either.
Unbridled capitalism is EVIL.
It is the law of the jungle translated into economics. It is destroying the earth all our children will have to live on, for the short-term profit of a few.

Germany, for one country I know a lot about, (and to my knowledge most other Continental countries) has never had it. They have always had a very strong social component to their politics, and just now the capitalists are moaning about that and want them to follow the American model, which has no attraction at all to any wage earner who has lived in both countries and knows the difference, or those that can see the facts of people's lives behind the statistics that tell them that the US are the richest country in the world.

Communism as Marx, Engels and Luxemburg envisaged it has never been tried, it seems not to be in the nature of humans to share equally and work for the common good for the sake of it. Every time it was tried it ended as a tyranny of the functionaries, but that does not mean it is intrinsically bad.

Edit:
I see that some people give the thumbs down for quoting statistics,(!) Can't you cope with the truth?

Answer 3

If we were talking about capitalism that weren't tempered with social devices like healthcare, anti-trust laws, welfare, the dole, and other things, you would be dead wrong.

Pre-FDR capitalism was self-cannibalistic. Capitalism unchecked leads to oligarchy and monopoly.

However, as we started to implement social programs and regulation, capitalism grew more healthy, but its core principles are very dangerous if a society is not careful about it, and no matter how much regulatory devices a society implements, there is always huge damage on huge groups of people.

Much of Western wealth is made by exploiting poor labor laws in third world countries, for example. Capitalism directly harms these people.

That is why the theories of socialist thinkers like St. Simone, Marx, Engels, Kojeve, Lukacs, Lenin, Trotsky, Bakhunin, and many, many others are so important to people all over the world. It's about finding a way to move capital into popular control, rather than autocratic, to cut out the harmful side effects of capital.

UPDATE (after having read your updates): Let me ask YOU a question to get you thinking in a new direction. If everyone in the world had an IQ of 140, and EVERYONE was disciplined and had lots of different and valuable skills, would there still be poverty? Poverty is necessary for capitalism to function, and it doesn't do a very efficient job of sifting out what you seem to describe as undesirables (I hate that word)

Answer 4

The answer is simple: JEALOUSY!!! The have-nots hate the haves because well, they have what they want! The main difference between the two is the have-nots aren't willing to work as hard and make the same kinds of sacrifices as the haves.

Wealthy people aren't that way by accident. They have a desire, they plan, and they work that plan until they have what they desire. Where in any of that do you think they COMPLAIN that they DON'T have? Probably not a whole lot. Instead of thinking "I don't have any of that" they are probably thinking "I will have all of that." But then again, wealthy people are probably too busy worrying about themselves to worry about what someone else is doing.

Then there's the feeling of entitlement I seem to see present in ALL poor people. They think it's some inalienable right they have to be financially stable, and they think the government should give them such stability. The only inalienable right you have as far as I am concerned is the right to an opportunity. What you do with any opportunities given to you is up to YOU and there's no one to blame but yourself. But the good news is you can always pick yourself up and try again.

Answer 5

Excuse me!!! Capitalism has created a vast amount of wealth for very few individuals... so much so that they are the one's who control and dictate the trickle-down effect for the rest of us. All those capitalist countries you mention have universal healthcare. I'm not knocking capitalism, just saying that it should be in partnership with government in a constructive and collective manner to enable the populace to enjoy a little tiny bit of the resources that are so abundant to the holders of massive and morbid wealth. If all men of great wealth had a history and conscious for being fair and generous, I wouldn't have answered this question.

Answer 6

I think most people confuse wanting to balance a system with hating Capitalism. Most people won't deny that Capitalism is in and of itself the best system of monetary management for a Nation. But pure Capitalism (which does not exist and was never intended to.. not even by Adam Smith, the creator of Capitalism) has no protection for the little guys.. and would eventually fail.. so you have to balance the system. All most people are saying is that we can balance the system with a few more Social programs and a few more of the right policies and make for a smoother, better and stronger economy and lifestyle.

Answer 7

The problem is UNRESTRAINED capitalism, not capitalism by itself.
Large corporations control large amounts of money, which gives them disproportionate influence in government.
Some of them seek to exclude their business from proper taxation and legal oversight.
Corporations SHOULD BE held to rule of law, just as individuals should be. This is not communism.

You have oversimplified the views of your opponents - and will continue to spin the "we say" - "you say" rhetoric wheel without understanding.

Answer 8

Because it works better than any other form of economic policy or political philosophy.
And America has mastered it.

Jealously and envy is a powerful negative emotion.

Answer 9

I don't hate capitalism, but there needs to be limits put on it to ensure that human beings are not abused in the pursuit of profit....watch "The Corporation" one day or read up on bovine growth hormone...it will turn your stomach what people will do in the pursuit of maximizing profit.

Answer 10

because worker wages are stagnant compared to executive gluttons.
from the house financial services committee website:
"In 1965, U.S. CEOs at major companies made 24 times a worker's pay-by 2004, CEOs earned 431 times the pay of an average worker.[1] From 1995 to 2005, average CEO pay increased five times faster than that of average workers.[2] While CEO pay continues to increase at rates far exceeding inflation, wages for the vast majority of American workers have failed to keep up with rising prices. In fact, real wages for the 90% of Americans who earn under $92,000 a year have actually fallen since 2001.[3]"