- 20 Dec 2010 11:04
#13581612
Just something I wrote, please point out any factual inconsistencies, or gaps in my knowledge, I am primarily here for self-improvement and improvement in my knowledge in regard to Fascism/Platonism.
Capitalism as we know it, or total Free Market economics as espoused by the U.S/Western World is slowly grinding to a halt. Much like Communism, absolutes have shown their failure in the modern world, and America itself has slowly distanced itself from pure Free Market Economics.
What's the problem? Central to this is the differing opinions held by nations and corporations.
Capitalism at it's extreme advocates the freedom and lax regulations necessary for corporations to flourish. Granted this has been the driving force of it in the PRE-GLOBALIZED world. The reason Capitalism succeeded in the U.S during 1945-1990 was mainly because U.S industry remained in the U.S and did not start outsourcing, primarily because the West/Allies had comparable labour cost ( allies in relation to the Cold War). Chinese investment only began in the late 1980s, following Deng Xiaoping's reforms of the Chinese economy. The U.S was economically at the peak of it's power when the Cold War was drawing to a close.
However, following the collapse of the Soviet Union, and the restructuring of the world around a unipolar world Superpower - the United States, economics rapidly shifted from mainly nation-centric and slight-investment/ capital flow to major capital flow/investment and less-nation centric. Eagerness to exploit the massive untapped market of formerly communist countries in Eastern Europe and Russia lead to investors pouring capital heavily into these countries, sponsored and encouraged by the government, who believed that democracy and Free Market Capitalism would go hand in hand. As we can see today, this is not the case in Eastern Europe, and instead of rising, the standard of living for some citizens has actually dropped from the Communist period.
Though this brings out another flaw in Capitalism, mainly it's incompatibility with democracy. it is not the primary one I am discussing and as such I will move on. Investment in China, East Asia, South-East Asia and South Asia was the hallmark of the post-Cold War age. Why should companies have to pay massive labour costs in countries like the U.S, Britain etc, when they could get a worker in China/India working in a factory for 1/10th the cost? As profit is the main goal of corporations, and not nation-centric interests, naturally corporations started dismantling and relocating industry and infrastructure to Asia. And with it went all the Capital locked up in that particular corporation, and as a result that Capital was removed from the American/European economy. However, the impact of this was not keenly felt until decades later, as these corporations continued to sell where cost/demand was highest, back at home in America, as such the shift from a production-based to a consumer based economy occurred. Sure, the companies are listed in the American stock-exchange, sure they still provide to the American people, but do these companies really "exist" in the physical sense to America? The answer is, clearly no. The transition from a "creating" (manufacturing) economy to a "consuming" economy is apparent.
But you ask, what's so critical about a manufacturing base? Is it necessary for an economy? The answer is extremely and yes.
Since most of the things that the are critical to the functioning of a modern society are manufactured, it is vital that a country hold some sort of portion of manufacturing, ensuring that they can't economically be held hostage by another nation who possesses manufacturing that they rely on. Being a consumer-centric economic wholly has almost little to no technological or progressive benefits to the country. Sure, America has some advanced pharmaceutics, genetics and aeronautics industries, but these account for a small portion of the economy, the majority of revenue is generated as a result of jobs providing information/administration and service to the "consuming" economy, and taxes on the imported goods that have changed hands. If you have an economy solely centred around catering to the consumer, the result is you are not going to see many industrial innovations appearing from that country. Why? Because most of the technology that is being aimed is aimed at improving and enhancing either the ease/comfort/standard of living/technology, for example, take the mobile phone, iPod or iPad. All have moved leaps and bounds, yet nothing "revolutionary" so to speak has changed industry yet. All that exists is a luxury market catered to improving people's entertainment and needs, BUT not the nations wants.
So as a result of its low-high-end manufacturing base, the U.S imports more goods than it exports, as a result it has a trade deficit, and a deficit of any kind isn't good. The thing is, China, which exports TO the U.S invest this money back into the American Economy, because without this, it would go bust, and if it went bust, so would the Chinese Economy. Now, what we have gentlemen and (ladies) is an economy on a timer. Can the U.S rebuild it's economy before China can abandon it for it's own domestic market?
Capital and Corporations flow like water, to the lowest point, in this case where labour costs are cheapest. If unregulated, they move swiftly to another nation, taking a vast amount of capital that has been invested in them by the nation (stock markets) and removing it from that nations economy. It is diametrically opposed to the interest of the state.
As such, a regulated economy, a la corporatism, is necessary, because one has to ensure that large corporations (where outsourcing occurs) have either state oversight, or state control, as this is the only way that the nations interests can exist or be put ahead those of pure profit-motivated corporations. Small-scale business would live on normally under Corporatism as it would under Capitalism, with subsidies to encourage small business, as Large Business tends to liquidate and destroy Small Business in its infancy. Protection for small business would be ensured by the State as well.
Also, a regulated economy would involve strict control of key financial sectors, like housing, who's deregulation was responsible for the sub-prime mortgage crisis and the eventual Global Financial Crisis. A relatively regulated economy would mean that not only the nations interests are not compromised, but that nothing like a financial meltdown occurs. Of course, the regulation must avoid necessary taxes and the such, as it would merely stifle potential economic growth.
To be fair to the West, a regulated economy is probably the only thing that can save them when China finally loses it's reliance on it's markets and shifts to its developing domestic market. A regulated economy would ensure that information, capital and most importantly manpower, remained in the system instead of flowing to a country where costs are cheaper. Would this mean running on a loss, especially if your standard of living is higher? Yes, and it is a governments duty to maintain the loss, UNTIL it can accelerate technological growth that can help the company compete on a global scale with companies employing lower labour costs. Why is it so necessary? All of the above on manufacturing says so, as it not only holds together the economy of the nation, but socially too, giving and fostering a sense of community within the industry.
Cheers,
A ironically Fascist/Oligarchist Lonekommie.
Capitalism as we know it, or total Free Market economics as espoused by the U.S/Western World is slowly grinding to a halt. Much like Communism, absolutes have shown their failure in the modern world, and America itself has slowly distanced itself from pure Free Market Economics.
What's the problem? Central to this is the differing opinions held by nations and corporations.
Capitalism at it's extreme advocates the freedom and lax regulations necessary for corporations to flourish. Granted this has been the driving force of it in the PRE-GLOBALIZED world. The reason Capitalism succeeded in the U.S during 1945-1990 was mainly because U.S industry remained in the U.S and did not start outsourcing, primarily because the West/Allies had comparable labour cost ( allies in relation to the Cold War). Chinese investment only began in the late 1980s, following Deng Xiaoping's reforms of the Chinese economy. The U.S was economically at the peak of it's power when the Cold War was drawing to a close.
However, following the collapse of the Soviet Union, and the restructuring of the world around a unipolar world Superpower - the United States, economics rapidly shifted from mainly nation-centric and slight-investment/ capital flow to major capital flow/investment and less-nation centric. Eagerness to exploit the massive untapped market of formerly communist countries in Eastern Europe and Russia lead to investors pouring capital heavily into these countries, sponsored and encouraged by the government, who believed that democracy and Free Market Capitalism would go hand in hand. As we can see today, this is not the case in Eastern Europe, and instead of rising, the standard of living for some citizens has actually dropped from the Communist period.
Though this brings out another flaw in Capitalism, mainly it's incompatibility with democracy. it is not the primary one I am discussing and as such I will move on. Investment in China, East Asia, South-East Asia and South Asia was the hallmark of the post-Cold War age. Why should companies have to pay massive labour costs in countries like the U.S, Britain etc, when they could get a worker in China/India working in a factory for 1/10th the cost? As profit is the main goal of corporations, and not nation-centric interests, naturally corporations started dismantling and relocating industry and infrastructure to Asia. And with it went all the Capital locked up in that particular corporation, and as a result that Capital was removed from the American/European economy. However, the impact of this was not keenly felt until decades later, as these corporations continued to sell where cost/demand was highest, back at home in America, as such the shift from a production-based to a consumer based economy occurred. Sure, the companies are listed in the American stock-exchange, sure they still provide to the American people, but do these companies really "exist" in the physical sense to America? The answer is, clearly no. The transition from a "creating" (manufacturing) economy to a "consuming" economy is apparent.
But you ask, what's so critical about a manufacturing base? Is it necessary for an economy? The answer is extremely and yes.
Since most of the things that the are critical to the functioning of a modern society are manufactured, it is vital that a country hold some sort of portion of manufacturing, ensuring that they can't economically be held hostage by another nation who possesses manufacturing that they rely on. Being a consumer-centric economic wholly has almost little to no technological or progressive benefits to the country. Sure, America has some advanced pharmaceutics, genetics and aeronautics industries, but these account for a small portion of the economy, the majority of revenue is generated as a result of jobs providing information/administration and service to the "consuming" economy, and taxes on the imported goods that have changed hands. If you have an economy solely centred around catering to the consumer, the result is you are not going to see many industrial innovations appearing from that country. Why? Because most of the technology that is being aimed is aimed at improving and enhancing either the ease/comfort/standard of living/technology, for example, take the mobile phone, iPod or iPad. All have moved leaps and bounds, yet nothing "revolutionary" so to speak has changed industry yet. All that exists is a luxury market catered to improving people's entertainment and needs, BUT not the nations wants.
So as a result of its low-high-end manufacturing base, the U.S imports more goods than it exports, as a result it has a trade deficit, and a deficit of any kind isn't good. The thing is, China, which exports TO the U.S invest this money back into the American Economy, because without this, it would go bust, and if it went bust, so would the Chinese Economy. Now, what we have gentlemen and (ladies) is an economy on a timer. Can the U.S rebuild it's economy before China can abandon it for it's own domestic market?
Capital and Corporations flow like water, to the lowest point, in this case where labour costs are cheapest. If unregulated, they move swiftly to another nation, taking a vast amount of capital that has been invested in them by the nation (stock markets) and removing it from that nations economy. It is diametrically opposed to the interest of the state.
As such, a regulated economy, a la corporatism, is necessary, because one has to ensure that large corporations (where outsourcing occurs) have either state oversight, or state control, as this is the only way that the nations interests can exist or be put ahead those of pure profit-motivated corporations. Small-scale business would live on normally under Corporatism as it would under Capitalism, with subsidies to encourage small business, as Large Business tends to liquidate and destroy Small Business in its infancy. Protection for small business would be ensured by the State as well.
Also, a regulated economy would involve strict control of key financial sectors, like housing, who's deregulation was responsible for the sub-prime mortgage crisis and the eventual Global Financial Crisis. A relatively regulated economy would mean that not only the nations interests are not compromised, but that nothing like a financial meltdown occurs. Of course, the regulation must avoid necessary taxes and the such, as it would merely stifle potential economic growth.
To be fair to the West, a regulated economy is probably the only thing that can save them when China finally loses it's reliance on it's markets and shifts to its developing domestic market. A regulated economy would ensure that information, capital and most importantly manpower, remained in the system instead of flowing to a country where costs are cheaper. Would this mean running on a loss, especially if your standard of living is higher? Yes, and it is a governments duty to maintain the loss, UNTIL it can accelerate technological growth that can help the company compete on a global scale with companies employing lower labour costs. Why is it so necessary? All of the above on manufacturing says so, as it not only holds together the economy of the nation, but socially too, giving and fostering a sense of community within the industry.
Cheers,
A ironically Fascist/Oligarchist Lonekommie.
Books and bullets have their own destinies
I agree it isn't necessary for the State to own the factories and enterprises, as long as it exercises a great deal of control. Fascists seemed cleverer than the communists; let the capitalists technically still own their enterprises, while in reality the State makes all the decisions. In the future, though, advanced tech might bring about State ownership. If machines eventually supplant much of humanity in the workplace, that could be the end of the market economy, and private enterprise. Those displaced won't be able to buy the goods produced, and they'll have to look to the State for employment or survival. Private companies will go under, and the State will take over, becoming bigger and more activist than ever.
Two things though: the soviets inherited that from the past, and just as we reject other aspects of past authoritarianism, like aryan racial theories, we needn't get "crocked" either. 
- By Tainari88
- By Pants-of-dog