T.C.O.W. 1: Is Capitalism the justification for Corporatism..

[Mr Khan]

HappySqurriel said:

Dark_Lord_2008 said:
Corporations are the things, they will lead us to economic and political freedom! Only they don't, they ship jobs and industrial capacity overseas to pump up this quarter's profits to increase bonuses, if they don't they are fired.

Ingrained in us from our first school days, the government should stay out of the world of business. That's communism.
The government shouldn't make laws that protect the individual. That's communism.
The government shouldn't help the less fortunate, that's socialism. The government shouldn't make sure that all of its citizens have healthcare and are highly educated, that's communism.
The government shouldn't invest in the future, that's communism.
So now a huge ball of debt and a huge economy to rebuild, and we automatically reject any from the other camp.
http://voices.yahoo.com/stalins-revenge-why-america-losing-cold-7899978.html

Actually, government making laws that protect the individual is the complete opposite of communism; and is the core of what democratic capitalism is about.

At its core communism is taking utilitarianism and applying it to a political system. This means that any harm inflicted on an individual (including death, sterilization, or any other atrocity) can be justified if the total benefit of this action throughout the country is of greater value. Unfortunately, the values are determined by a collection of high ranking members of a political party making any harm inflicted on an individual or group justifiable  as long as the benefit to the political leadership is of greater value.

What we are searching for is an economic system that produces the Nash equilibrium; which is the best possible outcome for the individual and the group. For the most part, while their actions are well intended, the influence of government within the economy tends to move us away from the Nash equilibrium. Using education as an example, when the government manipulates the credit markets to make student loans more affordable they create an environment where universities are nearly unbounded in what they can charge for tuition and students can make foolish choices about what they study; and the net result of this is a large number of highly credentialed poorly educated people with massive debt loads that will take decades to pay off who are protesting against individuals who made more rational decisions.

The job market will be forced to adjust if there were a true imbalance of credentialed individuals against what the market demanded. Higher payoffs for engineering and such keep people in those majors even if the workload is greater, but ultimately if there are many individuals with certain skills, they will essentially force the creation of a market with those skills.

And the issue with allowing the natural consequences of bad actions to replace regulation is that A: there is always going to be someone who thinks they can get away with it unless they are explicitly not allowed to (even then, some will try, but the punishments will be yet more severe than the "natural" punishments under a deregulated system), and B: how many lives or how much of the earth would be ruined before the "consequences market" corrects industry?

Democratic capitalism can go down the same scary road of Non-Nash Equilibria Utilitarianism that Communism can, simply if the values in the populace do not match up with morality.