Milton Friedman on Capitalism Vs Socialism
WaveCameCrashin
Posts: 2,929
WaveCameCrashin
Posts: 2,929
WaveCameCrashin
Posts: 2,929
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Part 1 of the whole interview:
http://www.youtube.com/watch?v=E1lWk4TCe4U
also - dude tries to claim einstein did his work in the name of capitalism and greed ... he can't be serious ...
i just don't agree with his greed is good mantra
Gotcha. And yes, I agree that saying greed is good is an odd way of explaining it. Otherwise I can't argue with the mechanics behind free market style systems, and that's why I subscribe to them personally.
i will agree it sounds good in theory but there are many flaws in it, alot of which has been seen leading up to the banking crises.
I disagree strongly there. The banking crisis is a product of over-regulation, and by "regulation" I really mean legalized fraudulent behavior on the part of banks, lending instutions, government, and ultimately The Federal Reserve.
Free Markets and sound money do not allow for banks to operate on fractional reserves or to counterfeit money. This is a special government-granted and government-protected power that allows them to function this way, creating a monopoly over the currency. It also provides the bailout mechanism that continually saves institutions meant to fail, and therefore always allows for poor business practices grow to the point where they become "too big to fail." True capitalism has not existed in this country ever, and cannot be blamed for the financial crisis.
Would it be almost impossible to implement this type of system at this point? Not after a complete collapse, which is exactly the direction that America is headed for.
People keep looking for the next "bubble" created by this boom and bust economy that is a direct result of centrally planned economies. The next bubble to burst just may be the dollar bubble, which will either set this country back to square one, or will force it to adopt another currency.
I'd just like to point out that true (fill in here) never exists concerning anything. The problem is always when you go from theoretical models over to putting actual real people into them. Mostly because economic theories tend to see people as rational cost-effective actors, which we aren't even close to being as any quick study of behaviour will show. Further, Friedman (and similar thinkers) doesn't really adress what happens with power, nor do they take into account that the starting point will never be a clean slate, but always dependent on historical developments and current society. If you allow for that someone will be in power owing to their position in market/society, and that you can't start from scratch (not even after a systemic collapse can you do that) it quickly looks very different from the theory.
So how about this one: The Soviet were not into "true communism", but that is what it will look like in real life with real people. America the last couple decades are not into "true capitalism", but that is how it will look like in real life with real people.
(edit) A relevant norwegian quote here for you:
Theory is when you know everything and nothing works.
Practice is when everything works and noone knows why.
Peace
Dan
"Every judgment teeters on the brink of error. To claim absolute knowledge is to become monstrous. Knowledge is an unending adventure at the edge of uncertainty." - Frank Herbert, Dune, 1965
i would agree with than here
http://www.youtube.com/watch?v=E0AiVASUZzU
I agree with part of what you say here-- the part about the rational cost-effective actors. True, not everyone is awesome at rationing out and determining a budget for him or herself-- but plenty of people, individually are very capable. The institution most incapable of budgeting and properly rationing services is government. It forces everyone to participate in a system where resources are blown billions and trillions at a time that rewards the rich, and further drains the poor of their wealth through inflation, especially under the guise of helping the poor. A more hands off approach may see people failing to provide for themselves on an individual and small-scale level, which hardly causes world-wide ripples affecting the economies of everyone else. A centrally-planned economy isn't even close to capitalism, nor would I argue that this is the natural end result of capitalism. If a concerted effort is undertaken to protect the civil liberties and rights of the individual, a true republic, capitalism will work just fine. There will always be forces that move against this idea, and these forces are only successful with one method: more government-- from welfare to warfare. With simple, clearly defined laws that protect against theft, fraud, and extortion, protecting a person's life and property, each case is clearly definable.
While a clean slate is impossible, a balance will eventually be sought even if it takes hundreds of years, which is the blink of an eye in the grand scheme of things, (although an eternity in our own lifetimes). Look at slavery in America, a government-protected institution abolished shortly after The Civil War that couldn't be more oppressive. It took 100 years to get a Civil Rights Act after slaves were freed. It is 46 years later and things aren't 100% hunky dory, but it's getting there. It is only after government eventually gravitated towards protecting the rights of the individual that Lil' Wayne is able to "MAKE IT RAIN"-- something his great great grandfather probably couldn't have conceived.
I feel the same way about markets. No matter how cornered, how controlled, there is only one entity that is the 100% defining factor in keeping it that way. Large, centralized, powerful government unafraid to use force to maintain the status quo. As its size increases, it becomes more attractive to gain control and use that power for special interests. If big business is the gangster, big government is his uzi. This goes for all forms of large government-- socialism, fascism, and whatever twisted combo of both you would call America 2010 (which I believe is more fascist than anything else). So, I disagree with you about the idea that our society is too far gone to embrace a more free market approach. It certainly will not happen overnight, and will not be an easy task. People are so used to having everyone else make decisions for them, but there will come a time where the cost of doing this will far outweigh the benefits. It's been happening for a long time now, many are just slow to come around.
I feel that striving for anything but a freer society and freer markets will eventually lead to "communist" USSR, which is a poor model for socialism, but the inevitable model for any country not willing to restrain the size of its government.
+100
and we should ad that, regarding Milton Friedman's PERSONAL politics on the topic, he was essentially in this camp as well.
While Milton typically worked with IN the system, and often even worked FOR the system, he knew full well how the game was run, and he was honest about it.
Specifically, when asked "What solutions are there to solve the problems with the modern banking system?", he came up with a list of several possible answers, which he ranked in order from least effective to most effective.
What did Milton Friedman say was the be-all end-all solution that he most preferred (while he acknowledged near total resistance to such an approach)? ABOLISH THE POLITICAL\PRIVATE CONTROL MECHANISM OVER THE MONEY SUPPLY, FREEZE ALL "HIGH POWERED MONEY" (essentially, the M1 money supply, or all cash and near cash, the supply which is most easily "regulated" by the Fed) AND ALLOW THE MARKETS TO CREATE THEIR OWN 2ND TIER MONEY SUPPLY.
Maybe that sounds like lingo to a lot here, so essentially, what Milton suggested as THE BEST approach to our current problems (inflation, recessions, the failures of trickle down, and the over accumulation of money in the top 1%) is for America to ABOLISH THE FEDERAL RESERVE, and to FREEZE THE MONEY SUPPLY.
In other words, whatever the current amount of cash in the system is, FREEZE IT. MAKE NO MORE. NO INFLATION. Then allow markets to create debt bearing notes to make up the difference for what productivity demands out of an economy. There would thus be no devaluation of the every-man's money, and the investment funds needed for capitalism to function smoothly would be readily available \ creatable out of the secondary "cash" market of private institutions (this was essentially how our country functioned BEFORE the institution of the national banking system).
A GOOD DOCUMENTARY BY AND ABOUT MILTON FRIEDMAN'S ECONOMICS:
MILTON FRIEDMAN - FREE TO CHOOSE (Part 1, 1980 version)
(there is a 1990 version too, with different discussion groups at the end, so really you can watch all of the 1980s ones, then the last 20minutes of all the 1990s ones if you wanted to be thorough,
If I opened it now would you not understand?
Friedman was a greedy ass. If you have ever seen the documentary "The Corporation"
http://www.thecorporation.com/
Or read Naomi Klein's book "The Shock Doctrine"
http://www.naomiklein.org/shock-doctrine
Based on breakthrough historical research and four years of on-the-ground reporting in disaster zones, The Shock Doctrine vividly shows how disaster capitalism – the rapid-fire corporate reengineering of societies still reeling from shock – did not begin with September 11, 2001. The book traces its origins back fifty years, to the University of Chicago under Milton Friedman, which produced many of the leading neo-conservative and neo-liberal thinkers whose influence is still profound in Washington today. New, surprising connections are drawn between economic policy, “shock and awe” warfare and covert CIA-funded experiments in electroshock and sensory deprivation in the 1950s, research that helped write the torture manuals used today in Guantanamo Bay.
You would know just how screwed up the man was when it came to economic theory and its relationship to reality and the actual lives of human beings thereof.
So let me get this straight. The link you gave wants you to buy this documentery that bashes capitalism ? Huh ?/
yeah ok
Dude if it were'nt for capitalism we would all still be shiting in a hole in the ground ?
Hey, isn't that your sacred capitalism at work?
Uhm, I dont think you took my point the way I intended it.
My first point was that noone acts as rational as the rational choice theory of behaviour would indicate. I'm not talking "some individuals", I'm talking all of us. For economics purposes, that model of rational behaviour usually holds true, because we're then in a defined world where indeed every company and actor is out to maximize profit in $. (But even here, economic theory often breaks down and can't explain what happens) For human behaviour purposes, that model has serious flaws in that humans can be documented to act counter to their own rational interests, and that we do not always seek to maximize profit (Not delving into the headache it would be to define profit in human interactions) in every action.
Secondly, my point was that ideal types never exist in real life. Communism is such a type and free market capitalism is such a type. Ideal types, especially concerning politics and society, are inassailable in theory and impossible in practice. That is because these theories invariably simplify to such an degree that huge swaths of human practice and behaviour "falls between the cracks" so to speak. But these things that the theories cuts out or look away from, exists and has consequences in practice. So, the theory will theorize people to act in a certain way, and that institutions will look a certain way. In practice, they don't act totally that way, and may well utilize completely different institutions because of it.
This was my point in equating communism and free market capitalism. Both work brilliantly, if human behaviour were correctly and exhaustively modelled. So if communism was right about human behaviour, it would be insurpassable as a system, and vice versa. Problem is, none of them are right, which means that supporting their implementation involves a starting point well settled in age-worn reality. So when you go from that to achieve communism, you'll probably get the Soviet or similar, while if you go towards free market from the current starting point, it will look suspiciously like the current american system.
Now, you may well strive for driving society further towards the ideal, but realize that you'll probably never really get there. And if you seem to do so superficially, you can bet that the content is way different than you imagined. You mostly expand on your ideal type and hope that it will come to pass. My point was that ideal types never come to pass, ever.
In closing I will remark that both communism and free market capitalism are essentially right about some people, and both (and myriads of other kinds) exist in current society. Since the theories essentially rules out that other types of people and mentality exists, well, how can any of them be remotely correct in their assumptions? This is what has transformed me from a true believer socialist into a somewhat cynic pragmatist with socialist sympathies.
Peace
Dan
"Every judgment teeters on the brink of error. To claim absolute knowledge is to become monstrous. Knowledge is an unending adventure at the edge of uncertainty." - Frank Herbert, Dune, 1965