Capitalism Is a Just Economic System

This has definitely been the best capitalism debate I have had on my two years on this site. I. Freedom and Self-InterestOne of the main problems with socialism is that it requires an authoritarian rule, making my opponent's entire argument here fall apart. Merriam-Webster first definition of socialism is: "A way of organizing a society in which major industries are owned and controlled by the government rather than by individual people and companies. " Even if we use the definition without a formal state: "A system of society or group living in which there is no private property," we see that this latter definition still requires a "ruling elite" of sorts. [1]In order for socialism to be maintained, a "government" is required, because free market forces will eventually turn a socialist economy into a capitalist one. For example, Under socialism, India kept Hindustan Motors protected from competition, while the same time in Japan Toyota was forced to compete in free markets because of government "negligance" (of socialism, if you will). A further point of note is that Toyota is a prominent company in the capitalist west because capitalism requires a better, more efficient product, whereas socialism seeks to purely benefit the worker in every industry, which makes the net benefit lower. [2]Further, "Ludwig von Mises argued that a socialist economy was not possible at all, because of the impossibility of rational pricing of capital goods in a socialist economy since the state is the only owner of the capital goods. Hayek further argued that the social control over distribution of wealth and private property advocated by socialists cannot be achieved without reduced prosperity for the general populace, and a loss of political and economic freedoms. "[3]In general, while capitalism is sustainable, and works best in a government-free society, socialism requires a government, and thus does not have either the best interest of the individual in mind, or the best interest of society as a whole in the long run either. II. Supply and DemandSupply and demand can only work its best in a purely capitalist economy. I will note two things here. One, people who immigrate to other countries come from even worse conditions in their home country, which most likely has a socialist economy with a repressive government. It is certainly an improvement of their lives, albeit it still looks bad to capitalist eyes. In time, immigrants will have an average income, as they get more acclimated to the economy. And two, in most countries where there is a famine problem, there is the very thing that the supply and demand system works against - shortage. While not everyone gets as much as they need, the resources are allocated most efficiently for the greatest societal benefit and shortage is reduced to its minimal level. The beautiful thing about a capitalist economy is that the consumers in general set the price: "Producers set the price, but consumers, by buying or abstaining from buying, are the final decision-makers as to whether the price set will lead to a profit. Producers in this regard are at the total mercy of consumers. If, at a set price, a producer cannot make a positive return on his investment because not enough people are willing to buy his product, the producer will be forced to lower the price to boost turnover. "[4]III. Competitive Markets and InnovationMy opponent makes a grave error when he mentions that capitalism requires intellectual property. Quite the contrary, intellectual property is a staple of protectionism created by people colluding with the government; in fact, pure capitalism does not have intellectual property, nor does it support, or even allow for, monopolies. "Firms in a capitalist based society face incentives to be efficient and produce goods which are in demand. These incentives create the pressures to cut costs and avoid waste. State owned firms often tend to be more inefficient (e. g. less willing to get rid of surplus workers and less incentives to try new innovative working practices. )" Competition encourages the best idea, because it is the one that nets the most profit. It may pit producers or inventors against each other, but in the end, it helps the consumer, and the individual, the most, and this is the goal of any sensible economic system, icnluding the one my opponent advocates for. [5]As for monopolies, "The theory of natural monopoly, Demsetz pointed out, fails to '. .. reveal the logical steps that carry it from scale economies in production to monopoly price in the market place. ' If one bidder can do the job at less cost than two or more, '. .. then the bidder with the lowest bid price for the entire job will be awarded the contract, whether the good be cement, electricity, stamp vending machines, or whatever, but the lowest bid price need not be a monopoly price. … The natural monopoly theory provides no logical basis for monopoly prices. '" Overall, there is no basis for the idea of a "natural monopoly". [6][7]It is capitalism that allows for the best use of ingenuity, passion, and the ambition of multitudes of individuals and makes sure it best serves society. IV. Private Property and CooperationI feel like my opponent dodges my arguments and refutations here and just mentions that my argument is ridiculous. Again, private property is the basis of moral behavior and of economic growth and overall prosperity because it guaruntees the individual the share of his profits to keep, which better serves society. "While this correlation is not strong and is merely suggestive of an underlying relationship between private ownership and mobility, the graph illustrates that those regions with greater levels of privatization in 2000 subsequently experienced greater declines in unemployment during 2000-2007. ": [8]"In fact, a characteristic of the classical liberal political ethos is that one scrutinizes a society for its quality, its goodness, and its justice on the basis of how loyal it is to the mission of securing the rights of individuals to their liberty and pursuit of happiness. " This explains how an individualistic society which features private property can be just. [9]As for cooperation, "Despite socialism’s refusal to recognize it, capitalism is founded on cooperation, and not only between capitalists within a given industry who might seek to regulate their markets and freeze out competitors. .. Consumers have cash to pay for what they buy because they have cooperated with their employers by showing up for work on time and performing labor, for which the employers cooperate by paying them. Consumers also cooperate with supermarkets by buying the products and paying cash (and sometimes even by returning shopping carts to the rack). " Capitalism is built completely on cooperation, unlike any other economic system. ConclusionCapitalism is definitely a just, if the the most just of any economic system that has ever been formulated. Its emphasis on individualism and private property help to create a base for moral behavior and societal prosperity, and the features of capitalism, such as supply and demand, an emphasis on innovation, and a stance against authoritarianism. Overall, capitalism allows for the greatest net benefit for society, and also best allows for moral behavior. Sources[1]: . http://www.merriam-webster.com...[2]: . http://en.wikipedia.org...[3]: . http://www.diffen.com...[4]: . http://mises.org...[5]: . http://www.economicshelp.org...[6]: . http://mises.org...[7]: Demsetz, Harold. "Why Regulate Utilities? " Journal of Law and Economics, April 1968, pp. 5565. [8]: . http://freepolicybriefs.org...[9]: . http://www.iep.utm.edu...[10]: . http://www.fee.org...