Capitalism

PreliminariesWhile Pro has not attempted to lay out a substantive case for capitalism thus far, I should say that my role in this debate need only be to critique Pro’s case for capitalism, as the resolution demands. That being said, I will present an affirmative view for a social democratic system in 3 specific areas, such is the difficulty placed by character limit. As my opponent stresses capitalism in its purest form to be “the most successful system, I only need show an area where some other system provides a better outcome and thus should be favoured to win the debate, and will leave it to my second post to critique my opponent’s case specifically, as his case is yet to be made.IntroductionMy first post will contend that a mixed market economy will be better than a capitalist system. This is because I contend the Government to more successful at producing healthcare for its citizens and protecting the social good through regulation, as well as insisting that Free-market capitalism does not, in fact, exist at all, except perhaps in the theoretical sphere.A1- UtopianismNow, while Pro uses America and others as examples of capitalist system, it should be noted that there is no country in the world which conforms to the capitalist ideal. All countries have a mixed economy, with even the USA having enormous government spending on entitlement programs, bailouts, extensive regulation. So one could end the debate here and now and follow Ghandi’s lead by dismissing capitalism as an idea, rather than a reality. This is due to several factors, one of which I will cover in A3 - that of externalities, but bearing in mind the resolution asks us to focus on free-market capitalism, the ironic thing here is that while the USA and similar countries might be more market-orientated than Sweden for example, they still engage in practices which many free-marketers (Friedman being the most obvious example) would regard as intrusive and unnecessary government intervention. In truth, free-market capitalism just doesn’t exist, nor is it feasible to exist, and as such a mixed market economy is far more favourable, if only on pragmatic reasons alone. Like socialism, some principles of the free-market might be possible to apply to certain areas in an economy, but, as we shall see, it becomes very difficult in even the most regular of occurrences to prioritise both its internal principles, and that of society at large.Second, inherent in capitalism are assumptions to try and deal with the problem of scarcity. Things like perfect competition, perfect information and perfectly rational bargainers exist in textbooks, not in society. Moreover, much of these things are not even conceivably attainable. How on Earth would perfect information of the market ever be sustainable? What’s more when one realises how this impacts the economy, the values of capitalism would quickly diminish, even if they were somehow attainable. Market success quickly breeds barriers to entry, stifling competition and threatening efficiency and corruption. Winners and losers are decided not by efficiency and so forth but by failures of the market: advertising (to correct information deficit), corporate welfare (in reality, if not in theory) and restrictive practices, all of which leave us with us with a system which may work in theory, but in practice is very limited in meeting the needs of even its own goals.ExternalitiesCurrently, the government have to regulate in order to guard against what are known as externalities, which is the impact an economic action can have on a third party. Examples of this include things like pollution, chemical and oil spills. Obviously, these can have devastating impacts on the health, wealth and lifestyle of people totally unrelated to the economic activity. So things like the BP oil spill, which decimated the surrounding areas, the tourist industry and so on would be one example (1). Why is this important? Well, as long as these externalities exist, “even an otherwise perfect market will fail to achieve social efficiency.”(2) Given this, things like regulation through laws and taxation and the like (i.e government interference in the economy) are the only feasible way to deal with this problem. Only a set level of practise restriction, compliance with binding rules, and other means can we best deal with all the issues, with regards to the passive consumer’s rights, as opposed to the producer’s. Put simply, I contend that without extensive government intervention, there are no plausible means to deal with this, and would invite Pro to submit whatever solution he desires.HealthcareFinally, I submit that healthcare is best provided by the state, both because of the theoretical underpinning of such a model, and because of the empirical data available. First, due to economies of scale “costs per unit of output fall as the scale of production increases”, and this due to a number of reasons, such as the container principle, spreading overheads and greater efficiency (3). Obviously, in terms of research and development, sharing information is also possible here, which in the case of either production or drug effectiveness is a clear plus such a system has over it’s capitalist alternative.On the empirical side, a WHO report (2000) (4) found that countries which had universal systems for disproportionately better than those without, with countries like France topping the poll, the UK performing well at 18th (despite a relatively low level of GDP spent), while the US spent more than any other country, but languished behind in 37th. The findings of the report was to “extend health insurance to as large a percentage of the population as possible.” The report concluded that:"In many countries without a health insurance safety net, many families have to pay more than 100 percent of their income for health care when hit with sudden emergencies. In other words, illness forces them into debt."Taking the UK & the USA as comparative examples of a predominately market-based system and a predominately socialised one: Britain’s socialised medicine has universal healthcare to all who seek it, prises better results, spends less on GDP, while the US system has millions uninsured, worse results, yet spends over double of its GDP on it (5)(6)(7), and this is typical, as the report above suggests, of state healthcare in comparison with largely market-based healthcare, to the extent that 89.9% of Britons would favour the NHS of US alternatives (8).Lastly, given that productivity is measured on the basis of, among other things, health, the provision of free healthcare to all has far greater economic benefit than just as an employer and an active money saver, as well as the moral case for insisting healthcare for all who seek it.ConclusionAlthough Pro has the burden of proof, with regards the resolution, I have provided 3 areas with which to doubt the application of capitalism as more successful than its alternatives. In order to win the debate, Pro must fulfil his burden, as well as showing that each of these 3 cases fail to compel us to favour a mixed economy.Sources 1. http://en.wikipedia.org...2. Essentials of economics, John Sloman, 3rd edition P2113. Ibid, P94-954. http://www.who.int...5. http://www.robaldridge.org.uk...6. http://www.visualeconomics.com...7. http://www.guardian.co.uk...8. http://www.guardian.co.uk...