Capitalism is broken

[famousringo]

HappySqurriel said:

famousringo said:

There are so many non-sequiturs in this post, I wouldn't know where to begin.

I guess for starters, I find it funny that you place so much faith in the "invisible hand" when your last post asserted that most people are idiots. There is no "invisible hand," just people making decisions. When it comes to spending money, they're all rational actors with perfect information, but when it comes to deciding what kind of economic system they want, they're confused little sheep who haven't got a clue.

Suppose political parties and policies are just another market, where people make decisions on how to spend their votes based on what represents the most utility they can get for their vote.

Suppose for a moment that these idiots understand that tighter regulation might mean less wealth to go around, but they feel that the stability gained from more regulation is more valuable than the extra wealth. Consider it an insurance policy against economic collapse, and one that most people feel is a worthy investment for the peace of mind that it brings, even if, like fire insurance, it's a policy that may never have to be cashed in.

The concept of the invisible hand has nothing to do with individuals being smart or making good decisions, just about making decisions which are preferable for them. The concept is used as a contrast to how inefficiently managed economies are run. Essentially, you can walk into a cereal section of your local supermarket and see a vast array of cereals which are manufactured to suit certain individuals tastes, and the flow of supply and the invisible hand ensures that each of these cereals are manufactured in the quantities that people desire. In contrast, if a communist government decides that the most efficient way to handle distribution of breakfast foods is to create a gigantic warehouse 5 miles out of a city which only holds Lennin-O’s that’s what happens; and if the government produces too few Lennin-O’s or too many Lennin-O’s it doesn’t really matter that much, and the government has little or no incentive to make anything that people actually want to eat.

Being a rational actor who is smart enough to decide whether you want a chocolate cereal with or one with marshmallows does not necessarily mean that you’re smart enough to decide the kind of economic system you want. Consider how individuals worship communist dictators without ever considering that communist dictators murder their own citizens, and communist countries have a nasty habit of mismanaging resources and producing massive famines; on this board there is an individual who loves Chairman Mao even though he murdered 70 Million of his own people, and the great Chinese Famine at the end of the 1950’s killed (roughly) 15 Million people. Do you really want someone with such poor thinking skills that they can’t understand "Chairman Mao = Bad" to decide the economic system you live in?

I've never seen Chairman Mao used as an argument against democracy before. That's... something.

If you're saying that some limits need to be placed on people's political decisions, I agree. I also think that some limits need to be placed on people's economic decisions, because people don't always make smart or good economic decisions. Most of the time I don't have a problem with that, but if they're making decisions on behalf of a lot of people (such as bankers), or if a large aggregate make the same bad choice (taking out a mortgage on new house on the assumption that real estate values always rise), consequences can be dire and afflict people who didn't make bad choices (people who just want a house to live in and can afford one).

Can we please stop the bullshit about equating regulation with a command economy, though? A very solid majority of people in that poll in the OP asked for more regulations, not for communism.