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Is Laissez-faire Capitalism Utopic?

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Felix

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Yes, it has a defense. It is unambiguously spelled out in the writings of Ayn Rand. Either you grasp what Miss Rand has written or you are beyond the Pale of Intellectual Concord.

It was intended as a joke. Sorry for the mistake. What is the Pale of Intellectual Concord?

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The term "Utopia" comes from a book of the same name written by Thomas Moore about a socialist paradise where no one has to do much work. The term now refers to any vision of an "ideal" society that is so disconnected from reality as to be ridiculous.

Correct. And Thomas Moore got "utopia" from the Greek word for "nowhere" or "no place", not on this planet anyway.

I could rightly say that all non-LFC systems have "built-in instabilities that will push them toward totalitarianism." That is, the ones that aren't totalitarian to begin with. LFC does not have these "built-in instabilities."

I think that the instabilities work both ways. Notice the collapse of many communist governments.

There are those who use their power to advance short-term irrational agendas and thus totalitarianism. And there are those who see the destructiveness of such policies and try to eliminate them.

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I do, however, believe that big business and established wealth tend to favor economic interventionism or government protectionism over laissez-faire capitalism. Freedom of association, free trade, and free competition are as much a threat to status quo conservatism as they are to egalitarian socialism.

Even the Chicagoans, who are veritable egalitarians compared to Objectivists and the Austrians, believe it's time for antitrust to be scrapped.

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I think that the instabilities work both ways. Notice the collapse of many communist governments.

Well, I think that the collapse of a Communist government isn’t due to “instabilities” in the system. (As in; a mixed economy has instabilities which will push it further into statism) A Communist system is simply impracticable, or at least not for long: the practitioners must quickly choose between less Communism and death.

So… maybe? Hard to say. Perhaps my analogy has simply stretched as far as it will go.

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Well, I think that the collapse of a Communist government isn't due to "instabilities" in the system. (As in; a mixed economy has instabilities which will push it further into statism) A Communist system is simply impracticable, or at least not for long: the practitioners must quickly choose between less Communism and death.

So… maybe? Hard to say. Perhaps my analogy has simply stretched as far as it will go.

Aside from its inherent altruistic immorality, communism outlaws free trade, i.e., the pricing mechanism necessary to coordinate the market economy.

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Idiom:

"beyond the pale"

Irrevocably unacceptable or unreasonable: behavior that was quite beyond the pale.

con·cord

n.

1. Harmony or agreement of interests or feelings; accord.

(Hope that helps)

Thanks. Seeing it written in capital letters made me think it was a special term.

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  • 2 weeks later...

Perhaps this comes from a misunderstanding of the philosophy but I'll just throw in some of my comments and get yelled at about them:

Ideally, LFC leads to the evolution of technology and culture. We expect this to happen because anything that benefits the self is bound to benefit other selves in the system. If I think to myself, "Hey, it'd be pretty cool if I had some sort of electronic light instead of this stupid little candle" then up and invent the light bulb, I might think to myself, "This is really awesome. I bet other people would give me lots of money in exchange for this thing. I like money, and money will help me realize other happiness, so I'm willing to trade my discovery for money." By doing this, the others in the system have been exposed to the light bulb. Then some other person might think to themselves, "Hey, I know a better way we could make this. It would last longer, burn brighter, etc." They proceed to invent this, decide to sell it any make money, and the cycle continues. Not only are better light bulbs produced, but the light bulb has more subtle and wider-ranged effects on technology. LFC is not the same as American C, since politicians currently place all sorts of petty restrictions on business-owners that ultimately make it more difficult to engage in the pursuits of unadulterated monkey-making. Given this, the benefits of LFC should be apparent under the current American C, just at a more slowed and not fully realized pace.

The whole system seems ideal. We continue to make things better, or figure out more efficient ways of doing things, which we don't really do for altruistic reasons. We do them because they'll make us wealthy. It just so happens that society will reap the benefits. But is this really the way things actually turn out? Exxon has admitted that it refuses to research alternative energy, despite the fact that oil WILL run out in 20-30 years. They have willingly, without government interference, signed the death warrant of their own company. Yet the reason they did this is was in the pursuit of money. American car companies refuse to outfit cars with currently existing, more efficient brake drums because they'd rather have their customers continue to pour money into replacements. Realtors engage in housing segregation, refusing to show minorities with enough money nicer homes in fear that rich white families will refuse to move into the neighborhood. Selling one black family a home is certainly less profitable than selling ten white families homes. In short, the system already reeks with corruption. It seems that LFC would only serve to magnify the problem.

Ayn Rand suggested that the critiques of socialism were validated by the fall of the USSR. It seems to me that the flaws of current capitalistic societies validate the critiques of LFC.

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Graatz, I'll deal mainly with your examples.

So what if Exxon refuses to research alternative energy (assuming that your claim is true)? There is plenty of incentive for other companies to develop alternative sources of energy. When the technology becomes feasible, perhaps Exxon will get involved with it and perhaps they won't. How does this demonstrate a failing of Capitalism?

As for the brake drum example, did you ever consider that American consumers might not be interested in paying the extra cost associated with brake drums that never wear out? Given that most replacement brake drums aren't even produced by the "Big 3" American car companies, there is somethig wrong with your logic. Also, if this is something consumers are willing to pay for, why don't the Japanese offer indestructible brake drums?

Regarding segregation, I think you would find that racism and segregation would be much less common in an LFC society than in one where we have a mix of capitalism and socialism. When people deal with each other as traders, there is little incentive to be an irrational racist. However, when the government distorts markets, racism and segregation often thrive.

Oh and by the way, Ayn Rand died in 1982, several years before the fall of the USSR.

Edited by gags
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Regarding the Exxon example:

1) No, we will not run out of oil in 20-30 years. If I knew I had a way to collect, I'd bet you a million dollars that we will not.

2) Let's suppose that were true. If Exxon were being irrational, then under LFC, they would go out of business and be supplanted by a more rational company. Thus the rational is rewarded and the irrational punished. The system works perfectly. :D

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