Capitalism

Thank you for challenging me to this debate! I would like to start by saying that I cannot begin to describe how refreshing it is to hear solid constructive cases against capitalism that do not include insults and the words "corporate overlords" and "fascists." The quality of your opening case gives me confidence that this will be an informative and pleasant debate. I look forward to it. I will structure my response by systematically refuting and redressing the errors within your contentions in the order you have written them. Capitalism is not as Productive as Cooperative Individualism/Economics I must begin by further defining cooperative individualism. Quoting Con’s third source, ‘a “cooperative” is an autonomous association of people united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled business.’ The underlying philosophy of the cooperative model is a variation of economic individualism where workers share ownership of their business, hence the term “cooperative individualism.” A brief excerpt from the Economics Library & Liberty explains that “economic individualism's basic premise is that the pursuit of self-interest and the right to own private property are morally defensible and legally legitimate[1].” It is important to recognize that the private ownership of property allows individuals to share their property in the pursuit of self-interest. This is the nature of privatization; “this is my property, I can choose to share it.” Capitalism is characterized by private property, capital accumulation, wage labor, voluntary exchange, a price system, and competitive markets, but (as it will be further shown later) is not limited to these characteristics. Given this information, we understand that capitalism does not necessarily exclude co-ops, rather, co-ops exist predominately and typically operate more successfully among capitalist countries ranking high in economic freedom. Private property and free trade are what normally make cooperative individualism possible in the first place. New Zealand and Switzerland are ranked by the 2017 Index of Economic Freedom as 3rd and 4th, respectively, of the economically freest nations on Earth [2]. Sweden also ranks almost 40 points higher than the world average in private property rights [3]. Furthermore, because they advocate private property, capital accumulation, wage labor, voluntary exchange, a price system, and competitive markets [see capitalism as defined in R1], Switzerland and New Zealand both meet the defined usage of "capitalism;” still, multiple successful co-ops can be found in each country. Migros is the most successful of these. Founded in Switzerland by Gottlieb Duttweiler, Migros was first established as a privately owned retail and has expanded internationally and become Switzerland’s #1 employer and retail chain [4]. This all transpired under capitalism because private ownership allowed Gottlieb to share his business. Despite claims made by Con, capitalism clearly does not exclude cooperative individualism. Furthermore, Con sources a list of co-ops organized by country. Ironically, the majority of these nations are defined as capitalist. To deepen this notion, [5] is Wikipedia link that includes more co-ops organized by their nation of origin. This supplements my argument as the vast majority of these co-ops operate in capitalist nations (as a funny side note, ACE is an American hardware cooperative listed on both of these sources. I live right down the street from one and never even knew that they were a co-op). Because I agree, I won’t contend that co-ops are more successful than traditional business models and that a larger scale implementation of this cooperative individualism will benefit the working class; however, I don’t need to. Co-ops are acceptable and exist predominately under the defined capitalist systems. Capitalism is Immoral and the Antithesis of Freedom I am one sentence into this contention and I need to stop you already. I hardly ever attempt to defend capitalism from a moral standpoint, but capitalism is not theft. As unethical as it is for management to keep an unfair portion of the total earnings a business generates, this system is voluntary. First of all, wages are the compensation for one’s labor; this is known as “wage labor.” Wage labor, as defined by Wikipedia, is “the socioeconomic relationship between a worker and an employer, where the worker sells his or her labor under a formal or informal contract [6].” Contracts are written or spoken agreements (voluntary), so the sale of labor is not theft (which is involuntary). Furthermore, and you guessed it, workers have the option to decide where they work. Regardless of how likely they are to get a job and how often they are advertised, options are still available for employees and they are entirely free to find new employment to sell their labor to if they do not like their previous one. By contracting their service, workers consent to whatever they are paid and however they are managed. Also, capitalism permits democratically controlled cooperatives, so the allegation that capitalism is inherently undemocratic is false. This should have been obvious, given that capitalism is an economic model and can be attached to any political model, such as a democracy. Capitalism Pretty Much Always Has an Unemployment Rate & Capitalist Businesses Are Not as Succesful as Co-Ops and Pay Their Workers Less I am going to combine these two contentions into one so my response is shorter and easier to understand. Your claim that capitalism always has an unemployment rate is correct, though I am confused about the relevancy of this statement. There has never once been an economy, capitalist or not, with 0% unemployment; for that reason, we can safely conclude that unemployment is not the result of capitalism. To resolve this issue, I propose two methods worth advocating. 1) We could deregulate markets and grant businesses more freedom. The World Finance Foundation has compiled a list of the five countries with the lowest unemployment rates in the world [7]. Numbers 2-4 all are classified as “free” or “mostly free” by the 2017 Index of Economic Freedom [2]; in fact, Hong Kong and Singapore rank 1st and 2nd. The exception to this trend is Thailand, who ranks 55th and is “moderately free;” however, figures from the Bank of Thailand suggest that working hours in the country are extremely low, with many people working fewer than 20 hours a week [7]. It seems to me that a simple government hands-off policy (which I will speak on later) would be an effective tool for reducing unemployment. 2) We could reduce unemployment through the means of co-ops. I wholeheartedly agree that co-ops are successful and that a larger scale implementation of this business model will reduce unemployment and result in workers being paid more; but again, this model is most prominent in capitalist nations. What is necessary for this proposal is a cultural reform advocating the implementation of this model on a large scale. But perhaps even better, we could combine these two proposals. As earlier demonstrated, co-ops are not a contradiction of private property and they exist predominately in capitalist nations. So rather than abolishing/attacking capitalism, we should simply educate people on what cooperatives are and encourage entrepreneurs to prefer that model over more traditional hierarchal models. I feel that this is much preferable to the total abrogation of capitalism. Capitalism Needs Government Intervention to Survive as well as Special Favors from Banks Recessions are a natural phenomenon of all markets and nothing is going to solve that, not even cooperative individualism. This fact of economic nature occurs in every form of market, what differs are their responses to them. Keynesians do argue that it is necessary for a government to intervene in the economy to keep it going, but Keynesianism is not the only capitalist theory. For example, Rothbardian economists argue that government interference in the market is detrimental to an economy and that bailouts only create harmful dependency. I normally take a more Austrian/Rothbardian approach to economics due to its success. Good examples of this would be nations such as Switzerland and Hong Kong. The governments in those nations are not very involved in regulating their economies, especially compared to the US and Sweden, who both impose a fair amount of regulation. What is important to note is that the GDP per capita of countries with Austrian-style economics is typically higher than those with high regulation [3, 8, 9, 10]. It is only fair to say that not all capitalism is created equal and Keynesianism is not as successful as the more hands-off policies of Austrianism. It seems to me that capitalism is not the issue, but rather restricted economic freedoms. Due to space reasons, I will have to write more constructive cases sometime later. I await your response! Sources 1) http://www.econlib.org... 2) http://www.heritage.org... 3) http://www.heritage.org... 4) https://en.wikipedia.org... 5) https://en.wikipedia.org... 6) https://en.wikipedia.org... 7) http://www.worldfinance.com... 8) http://www.heritage.org... 9) http://www.heritage.org... 10) http://www.heritage.org...