Capitalism vs. Socialism

Forgive me because I am not familiar with the normal axioms of debate yet. But here I will rebut your rebuttals? lol 1, For your first rebuttal, actually if you look at any company that begins to treat its customers unfairly you will see a fall in that company. Perhaps in the short run a company can "screw" over its customers, but in the long run more options will become available through the free market system. For example look at what happened to Blockbuster, Its customers were becoming very unhappy about the ways it did business and so when Netflix came around blockbuster went belly up. That is just one example of people voting with their money. And its not that a single person has significant voting power, its the aggregate shift in demand for a good that everyone is apart of. i.e. if a lot of people see a company doing something bad then that company will do poorly. 2, Im going to make a second response to your democratic planning method, The problem with central planning(through government or through producers) is again that no matter how much expertise someone might have with a good they are selling, they will not have an accurate prediction of what is demanded of that good. It will cause surpluses in some areas and shortages in others, it is best left to the consumer market to say what is demanded. Rather than the producers. 3, My response to the labor theory of Value is a response from carl menger: Derived demand, "Goods acquire their value, he showed, not because of the amount of labor used in producing them, but because of their ability to satisfy people"s wants." (1), So an increase in productivity would not necessarily cause an increase in demand. And even a more intuitive example would be appropriate. We can look at labor as a demand curve, The more people looking for a job (i.e. low skilled jobs) the lower wage for the job. And wages are generally set by the aggregate demand for labor since their production does not contribute to the demand of the good. Now my rebuttal about the flaws of capitalism. 1, Yes there is a natural cycle of recessions, and peaks of a capitalist economy, this is due to the self regulating nature of a capitalist economy, there are things the government can do to shorten a recession but never the less they are unavoidable. The stated alternative to this system would be to have a democratic planning system. This type of system would cause even more waste than the capitalist system, again the producers have no concept about what the public will demand of their goods, It is best left unto the individual producer to estimate the market for his good. (3) Classical economics rely on the individual doing what is in his own best interests, that is what it means to be a rational person, and in doing so their is an invisible hand effect over the economy, (2) 2, That is true, the best way the government is supposed to operate is to make the economy as competitive as possible while making it business friendly. Many regulations today come from many market biases that skew how the economy really works stated from the book I mentioned before. The problem with a socialist economy is that incentives for the individual become smaller and smaller as the wealth is redistributed, which is only leads to poor innovations and poor economic growth. (3) 3,While I agree with you that it is difficult to make competition fair, it does not lay claim that a consumer is irrational, it simply means the individual values his money more than he does quality, and there are plenty of examples of small businesses that are very successful due to their high quality and high prices because there is a market for them. They just tend to grow very rapidly, and aren't considered mom and pop businesses anymore. Imagine a company like Rolex, While not a mom and pop business, people buy their products because of quality. 4, And that is what government regulation is for, so that it prohibits people from hurting the environment/people with their business practices. But keynes had a very skewed opinion of the invisible hand, Wicked men doing wicked things don't contribute to the greater cause, people in it for them selves contribute to the greater cause. (2) While it is a delicate balance between government regulation and a free market, Despite what people might tell you America has done a very good job at doing both, While there is room for human error, no other nation has had the economic prosperity America has had. (1) http://www.econlib.org... (2) http://www.econlib.org... (3) http://www.econlib.org...