The Instigator
Rob1Billion
Pro (for)
Losing
0 Points
The Contender
Danielle
Con (against)
Winning
31 Points

Capitalism

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Voting Style: Open Point System: 7 Point
Started: 8/1/2010 Category: Politics
Updated: 6 years ago Status: Voting Period
Viewed: 4,921 times Debate No: 12551
Debate Rounds (3)
Comments (21)
Votes (5)

 

Rob1Billion

Pro

My first debate in a very long time. I would like to keep the character limit at 4k if we could for readability and increasing participation in voting.

The first two contentions are theoretical while the last one is practical.

You can criticize the system we live by, but
*** 1) We have this system for a good reason: it works.

It has been nothing short of miraculous for 70 years straight in the US and the US has been and will be the best place to live in the world for the foreseeable future. Criticizing capitalism necessarily means that you have a better way to run the country than we do now. The problem is, no other way has been shown to work as good as capitalism in the real world. An American criticizing capitalism is like a Saints fan criticizing the franchise at this time. Like, WTF FOR?!?

*** 2) Capitalism is the most benign method to keep everyone in society productive.

How else do we keep everyone contributing? Without capitalism, we would have to either force people to work arbitrarily or provide for them regardless of whether they contribute. We could use some other motivator besides currency but this would add unnecessary complexity to the system and likely reduce efficiency and practicality. All of these are clearly inferior to letting people just choose what they want to do and let the people who interact with them give them their worth in return with currency because currency is the simplest way to exchange worth.

*** 3) Capitalism works best without interference.

Regulations usually only interfere with the efficiency of the system. Take the BP oil spill, for example. BP should have unlimited liability for the clean-up, but it doesn't. Why? Because the government has stepped in and disrupted the market. If we simply made businesses sue-able for damages they inflict (clean-up of environmental disasters) then they would have understood prior to the disaster that they hold unlimited liability for the clean-up. They would have certainly been much more careful about causing a disaster in that situation and it may not have even happened. But with regulations, they can afford to be sloppy sometimes. There are always bail-outs for businesses that are too big to fail, after all, and the US gov't seems all too quick to declare caps to how much BP is liable for. The free market, therefore, holds the correct alignment of interests.
Danielle

Con

Many thanks to Rob for sending me this debate challenge (and for his patience). This will be 1 of 2 debates where my opponent and I will be discussing both sides of laissez faire capitalism. In this debate, I'll be addressing Pro's three main arguments, and illustrating how government regulation or intervention in the market is or can be overall productive and more beneficial than leaving the market to its own vices.

---

1) Re: Capitalism Works

Pro brings up a few arguments here - namely that the U.S. has thrived off of capitalism, and that there is no other comparable model which yields positive results like capitalism does. I disagree on all accounts. First, let's consider whether or not the U.S. has truly been a pure model for capitalism throughout our nation's history. The Industrial Revolution was a historical turning point in determining the fate of many markets. England, for instance, shipped 40% of their textiles to colonized India which strengthened the English economy while not allowing India's to develop (all profits were outsourced). On the contrary, British steel was kept from U.S. markets via high tariffs which allowed the U.S. to develop its own steel industry. Japan applied similar methods, and thus we were both able to compete in the global market as opposed to many other nations which became what we know today as "third world." So as you can see, this blatant example of government interference in the market is largely responsible for what allowed the U.S. economy to develop in the first place. This disproves Rob's theory that the U.S. has pure capitalism to thank for all of its success.

Moreover, there are plenty examples of countries which espouse non-capitalistic policies and yet are thriving economically. In a recent issue of the World Bank 'Research Observer,' the Chair of Clinton's Council of Economic Advisers draws "lessons from the East Asian Miracle," among them that "government took major responsibility for the promotion of economic growth, intervening to enhance technology transfer, relative equality, education, health and industrial planning." He noted that no other part of the world had seen income rise so drastically as well as so many people moving out of poverty in such a short amount of time [1].

Additionally, we only have to look to a model like Japan's to see how other economic options yield successful results. A group of prominent Japanese economists recently published a review of Japan's economic principles post WWII. They pointed out that Japan rejected the neoliberal (capitalistic) policies of their U.S. advisers and opted instead for a more state controlled manufactured economy. The results are more than impressive: by the 1990s Japan was the world's biggest manufacturing economy as well as the world's leading source of investment. It also accounted for half of the world's net savings and financing U.S. deficits. Also, let's not forget that the most financially stable and significant country to loan money to according to the World Bank is China. So, in short, there are plenty of other financial models with success stories and that produce results equal to or better than capitalism. All points here have been dismantled.

2) Re: Capitalism is Necessary for Production

Pro says that without capitalism, we would have to either force people to work arbitrarily or provide for them regardless of whether they contribute. What I'm wondering is why. First, you can have market interference from the government without espousing socialism. Second, even under socialism there is an incentive for wealth. Just because certain aspects of life may be covered at government's expense doesn't mean that people want to remain at the bottom of the barrel in terms of monetary success. People don't JUST want health care or education - they want wealth and luxury too. The aforementioned examples of success from non-capitalistic societies such as Japan prove that people don't need capitalism in order to thrive or be productive.

3) Re: Market Interference is Bad

Pro's point here is "Regulations usually only interfere with the efficiency of the system." Once again, the various examples of successful non-capitalistic nations prove otherwise. Regardless, I'm pretty sure Pro presented a less than accurate representation of capitalistic policies. He notes that with government regulations of business, "business can afford to be sloppy sometimes" and mentioned the BP oil spill and government bailouts of big business as examples to prove his point. However, the government bailouts of business are exactly what capitalism is AGAINST. A true capitalistic society would have let the corporations fail instead of guarantee help from the tax payers. Further, it can easily be argued that capitalism is directly to blame for the BP oil spill in the first place. Corporations controlling vast social resources make decisions affecting millions of people (and animals / the planet) on the basis of profit. Had the government imposed various safety regulations beforehand, measures would have been taken that could have saved a dozen lives, the environment, and people's businesses that were directly affected from the spill.

---

There are many critiques of capitalism; I'll briefly introduce some here. For one thing, history proves that government intervention (especially via tariffs) helps economies develop and grow which keeps them competitive in global markets - one example of why many countries have been far more successful than others. This not only ensured jobs for citizens, but kept the cash flow in our markets. Additionally, the government playing a role in markets has allowed various countries to control the input and export of goods which affects profit and where people's money is spent. Investing in infrastructure, manufacturing and even education also helps in ensuring an educated society with the ability to work and make a living for fair wages.

Perhaps a moral issue regarding capitalism is that all people are not given equal say in the public sphere. For instance, the public is supposed to "vote" in the free market via their purchases. How they choose to spend their money dictates the whims of the public. However, an obvious discrepancy is that certain people have far more wealth and therefore far more influence in society. Therefore a true representation about the wants and needs of the public can never truly be discerned. Just because one cannot afford something does not mean that this something is not necessary or at least useful - like education.

Other critics of capitalism view the system as inherently exploitative. Karl Marx for instance discussed an inevitable class war rooted in the reality that workers had no control over their production. Plus, if workers tried to fight the system in order to negotiate higher wages (for example), there will always be someone from the reserve army of labor willing to work for cheaper wages [2]. History has also shown us that capitalism mandates a huge disparity between the rich and poor, thus guaranteeing exploitation as exploitation can exist even with consent.

I'm out of characters for now, but in short, having some (even minimal) government interference in the market can prove far better for society than expecting pure capitalism to achieve fair or favorable results. For one thing, a minimal standard of living represents humanity's progress; we've matured as a species far beyond our innate animal instincts to achieve higher morality. In some cases, social need should trump corporate greed. For another, investing in education and various aspects of the economy proves useful at creating a competent, innovative and competitive workforce.

References:

[1] Chomsky, Noam. Profit Over People. 1999. Seven Stories Press. pp. 32
[2] http://findarticles.com...
Debate Round No. 1
Rob1Billion

Pro

***1) Capitalism works

Con does not challenge my assertion that the United States is successful, but puts her efforts into differentiating the United States with capitalism. The success of the US, therefore, must have more to do with something else. Con cites tariffs as this entity, and cites the success of the US steel industry on the back of tariffs which gave US steel mills an advantage. She also insinuates that Japan's economic success is due to governmental intervention as opposed to free market mechanisms.

Tariffs were very important to the US economy - during the US's least successful times. The US rose to superpower status after WWII, which also marked the decline of the use of tariffs [1]. In 1947, the US passed the General Agreement on Tariffs and Trade (GATT) "to minimize tariffs and other restrictions, and to liberalize trade among all capitalist countries." Apparently the great depression had the effect of causing us to change our act, and after we did, well, the rest is history. The United States, with its increasing use of free market mechanisms, became the greatest economy the world has ever known. We started taking advantage of comparative advantage, for example, and watched our television manufacturing sector slowly disappear completely to Japanese companies [2]. Instead of panicking and regulating the industry back into existence, we realized that while the Japanese can make televisions more efficiently than we can, we can make other items more efficiently than the Japanese - and therefore we maximized the efficiency of both nations. This phenomenon is unique to capitalism and largely explains our post WWII success.

Con has failed to introduce enough evidence to substantively differentiate the US's success, particularly that of the late 40s and beyond, from free market mechanisms. Although a radical "libertarian socialist" like Noam Chomsky would likely disagree, I don't think the generally accepted economic explanation of the US's prolific economic growth over the past century would fail to put the free market's role as one of the cornerstones of our proven success.

***2) Capitalism is the most benign method to keep everyone in society productive

Con insists that people will continue to be productive without capitalism, in order to attain fine goods. Her entire argument seems to be under the paradigm that socialism can be capitalistic, and therefore capitalism is not necessary for people to capitalize financially (in order to work harder and thus achieve a higher standard of living). I would like Con to go into more detail about how someone capitalizesunder a socialistic system. Seeing her walk this tightrope will be interesting, because what she really is describing is capitalism mixed with socialism. Socialism does not inherently reward the successful with wealth unlessyou add capitalist elements to it.

Secondly, I have made a clear point here, and backed it up with evidence: capitalism is the best method to increase productivity. What is more productive and why should we use it instead of capitalism?

***3) Market interference -

Con: "He notes that with government regulations of business, "business can afford to be sloppy sometimes" and mentioned the BP oil spill and government bailouts of big business as examples to prove his point. However, the government bailouts of business are exactly what capitalism is AGAINST. A true capitalistic society would have let the corporations fail instead of guarantee help from the tax payers."

I'm not sure how this is supposed to damage my argument; of course I would agree with you that capitalism is in solid disagreement with the concept of bailouts, and that the bailouts allowed a liability loophole that screwed over our country. 3 Cheers for capitalism.

Con then blames capitalism directly for the oil spill - "Corporations controlling vast social resources make decisions affecting millions of people (and animals / the planet) on the basis of profit. Had the government imposed various safety regulations beforehand, measures would have been taken [to save the planet]..."

Decisions in a society will have to be made by someone. I can understand the more specific point that you thus must be making, which is that businesses are not the proper institutions to get the job done. Tell me who should be making these decisions and why they are more capable. As far as "safety regulations" are concerned, the limited liabilities they are enjoying are only possible because the free market has been tampered with. Safety, therefore, is a variable that the free market takes into account; it was simply removed by the cap on liability and gave them a parachute in case something went wrong. IOWs the government intervened and caused the oil spill, not capitalism.

"government intervention (especially via tariffs) helps economies develop and grow"

Con says "many countries have been far more successful" because of tariffs but does not provide examples for me to scrutinize. Ensuring jobs and controlling cash flow/where people spend their money through tariffs are not as important as preserving the market mechanism of comparative advantage. For example, if the United States had tariffed Japanese televisions they would have offset the comparative advantage of the Japanese companies (especially when you factor in cost of S&H). American companies would have kept making TVs and made inefficient use of their resources and we likely would have felt the effects to some extent throughout the entire economy. Inefficiency isn't helpful to development and growth.

"Investing in infrastructure, manufacturing and even education also helps in ensuring an educated society with the ability to work and make a living for fair wages."

That is up for debate, actually. If there was no such thing as public schools, private schools would simply be more predominant. Manufacturing is already privately run so I'm not sure what your point is there. Infrastructure could be easily handed over to the private sector as well. Businesses in town will be interested in improving conditions conducive to travel and will be therefore financially motivated to fund infrastructure. Businesses would also be able to advertise through these improvements; IOWs businesses will have natural capitalistic motives to improve the town due to the increase in tourism and the branding of being a community building business. Public infrastructure funding destroys the market's ability to take advantage of this natural positive alignment of interests.

Con next employs a moral analysis of capitalism, declaring that since dollars are votes our interests are being weighted unfairly. To that I say that the fact that someone can impart more influence than another is simply a fact of life. Whether it is a mother controlling her daughter, a politician voting a law into existence, a judge deciding a man be put to death, or a businessman renting billboard space, there is going to be more influence and power concentrated into certain individuals. The only thing up for debate here is whether letting currency decide who this is is a good method or not. So far you haven't introduced anything to better control the balance of power in the nation.

Exploitation - There is always going to be exploitation, and yes, capitalism is certainly more likely to increase the occurrence of it compared to socialism, for example. But if the system is running smoothly, like America's historically has, then people are still going to be well-off, exploited or not. Americans are "exploited" by capitalism but enjoy a fairly high standard of living, on average. Perhaps we will always feel exploited in one way or another...

1) http://en.wikipedia.org...
2) Roberts, Russell. "The Choice: A fable of Free Trade and Protectionism". 2007 Pearson publishing
Danielle

Con

1) Re: Capitalism Works

Indeed the U.S. is considered the richest country based on 2009 stats from the International Monetary Fund considering GDP [3]. So, Pro's point here is that the U.S. is successful and thus whatever we're doing must be right and helpful. While I pointed out that tariffs helped sustained the American economy post Industrial Revolution, Pro asserts that this is irrelevant considering our economy expanded the most in the latter half of the 20th century after the U.S. minimized tariffs. However, during this period, the U.S. was undergoing its own economic expansion as corporate managers took over the state-coordinated wartime economy. Marshall Plan aid was tied to the U.S. purchase of agricultural products, which is part of the reason why the U.S. share in world trade with grains increased by about 50 percent by 1950 while in places like Argentina it declined by 2/3. Additionally, U.S. Food for Peace aid was used to subsidize U.S. agribusiness and undercut foreign products among other measures.

Washington has used its power to bar independent development elsewhere and eliminate foreign competition. For instance, Kenya's textile industry collapsed in 1994 when the Clinton Administration imposed a quota, barring the path to development that has been followed by every industrial country. After WWII President Truman said the government should use the word "security" over "subsidy" to make them look better for choosing to interfere, and keep innumerable businesses afloat (as the U.S. thought the economy would head back to a Depression without interference) - most notably that of Boeing and other commercial aircraft.

Even the alleged hero of the market - Ronald Reagan - was not a capitalist. According to Foreign Affairs, the Reagan administration presided over the greatest swing of protectionism since the 1930s, and without these and other extreme measures of market interference, it is doubtful that the steel, automotive, and machine tool industries would have been able to survive Japanese competition or forge ahead with emerging technologies [1]. This negates Pro's statement that I have failed to introduce enough evidence to substantively differentiate the US's success beyond the 1940s.

In short, our policies have been FAR from capitalistic. Pro tries to discredit tariffs (which have proven to be instrumental in economic development) but yet there are far more examples throughout our nation's history - including post 1940s - which prove my point: that market intervention has been useful regarding the U.S. and other global economies. For instance, after Japan's stock and real estate bubble burst in the early 1990s, their economy staggered along for half a decade until the government finally stepped in to restructure the financial sector. During the Asian financial crisis of 1997-98, state action was crucial to rebuilding moribund banks and companies [4]. History from all over the globe shows that government intervention can be useful if not necessary in sustaining a successful economy.

2) Re: Capitalism and Production

Pro says, "Her entire argument seems to be under the paradigm that socialism can be capitalistic, and therefore capitalism is not necessary for people to capitalize financially." Obviously this is a straw-manned argument; where did I ever say that socialism can be capitalistic, or espouse socialism at all in the first place? What I did say is that there is still competition under socialism. Therefore Pro's argument that capitalism is necessary for production does not hold any weight, as he has given absolutely no proof of this claim.

In the last round he writes, "Socialism does not inherently reward the successful with wealth unless you add capitalist elements to it." Pro seems to misconceive capitalism; there is a difference between capitalism and competition. Capitalism merely refers to completely private means of production with no government interference in the free market. I have stated that you don't need capitalism for competition, and that you can have successful production without capitalism. Pro has not proven otherwise.

3) Re: Market Interference

Here I misunderstood Pro's argument -- He was saying that without capitalism, businesses can afford to be sloppy and thus just be bailed out by the government if they fail. I pointed out that bailouts were anti-capitalistic which he noted was in agreement with his argument. So, I suppose my point was that regulation could be a positive thing (and is a blatant violation of capitalism), but bailouts are not mandatory or relevant in a system just because it's not purely capitalistic. For instance, had safety mandates been issued to BP before the spill, the regulation may have prevented the disaster. However even if it hadn't, that anti-capitalistic policy of enforcing regulation does not mandate that the government or tax payers have any responsibility to BP whatsoever even post-spill.

In response to my point that corporations make decisions that affect millions of people and the planet, Pro asks who instead should be making these decisions and why they are more capable. My point was that profit should not be the primary factor in decision making over the welfare of the people, and that people's health and other rights should be considered. Even if I agreed that corporations should be responsible for their own choices, it does not mean that profit should be the sole concern which is indeed the case under capitalism. In fact, in the U.S. we have business laws that literally mandate profit as the number one concern of employees for their shareholders. Now I'll turn the table and ask Pro why profit should be the sole motivating factor and is more important than the lives and health of those affected by corporations, with little to no say in the impact on their livelihoods.

Pro continues, "Safety is a variable that the free market takes into account; it was simply removed by the cap on liability and gave [BP] a parachute in case something went wrong." Safety is a variable considerable in the free market, but it is not guaranteed or ensured. In a situation where a mistake can devastate not just a few lives but many - including the environment and many businesses - then those who could be affected should be protected or have a say in the going-ons of corporate acts that could destroy them. Without government regulations, BP would not have been liable for anything. Even if BP then went under and failed post-spill, it would mean their demise but not rectify the damage caused to those harmed by BP in the first place.

Next Pro tries to correlate inefficiency and a lack of capitalism. This refers to the #2 argument that capitalism is necessary for production (which my opponent has not proven). He also provides an example regarding Japanese products saying that a tariff on Japanese goods would not ensure that U.S. products were successful. You'll note that (a) I've already pointed out tariffs are just one successful and useful means of intervention with great benefits but no guarantees - (b) he's using an example regarding a nation whose success relied on intervention in the first place.

Next, Pro discusses how the private sector could easily take on all markets in which government tends to invest. In addition to the handful of discrepancies that would occur (i.e. a more uneducated society, for one), this doesn't address certain exploitations and divisions I mentioned in which people are inherently and necessarily kept down. It also ignores that public intervention can be useful or necessary. Finally, Pro concludes by pointing out that life's not fair and as such certain people will simply have more power over others. I will address this argument and others in the next round (outta characters).

[3] http://www.worldsrichestcountries.com...
[4] TIME magazine - 11/25/08
Debate Round No. 2
Rob1Billion

Pro

Rob1Billion forfeited this round.
Danielle

Con

Unfortunately my opponent had to skip the last round, so here I'll just give a brief re-cap of the debate. Pro's main arguments were that capitalism works, and works best without interference from the government. He also notes that capitalism is the best method at keeping society productive. To illustrate these points, he cites the U.S. has a prime example of capitalism at its best, making it one of the most successful nations in the world.

In response, I gave a plethora of examples proving that the U.S. has been far from capitalistic since its inception. From instilling tarriffs which helped develop the American economy during the Indutrial Revolution, to large government subsidies helping fuel and sustain the economy during WWII, even to present day regarding quotas we impose on other countries, our government and the market have been intricately interwoven making the market (and American success) what it is today. Further, other nations that have implemented less than capitalistic policies have been even more successful or have demonstrated large turn-arounds in their economies thanks to government interference. In short, it's completely untrue that the U.S. has economy has been left to its own devices, and in reality we have intervention to blame for a lot of our eminence.

Additionally, I have demonstrated that profit should not be the sole considering factor of business (under U.S. law - it is), and unfortunately Pro was unable to respond to my questioning regarding what *should* matter or be considered in corporate decision making. With the motive strictly being profit, there is no insurance for the community, environment or even other businesses that may be affected. In relying on the market to resolve its own issues, you're basically deferring morality to dollars: whoever can afford to prevails. A true community representation cannot be determined via the market, because in America the top 1% owns more than 90% of the combined wealth of others [1] -- and worse, 2% of the world owns 50% of the world's wealth [2]!

In conclusion, I have proven that government intervention in the market helps grow and maintain successful economies (via historic and economic facts), and that regulating our economy helps ensure society is protected from corporate greed which solely values profit - even at others' expense. I fail to see how capitalism was described as being the most superior economic standard considering repercussions on both the economy and society in general. Thanks for the great debate, Rob, and good luck :)

[1] http://afgen.com...
[2] http://shell.windows.com...
Debate Round No. 3
21 comments have been posted on this debate. Showing 1 through 10 records.
Posted by Rob1Billion 6 years ago
Rob1Billion
Is it just hard to take me seriously, knowing I am the most outspoken opponent of capitalism on DDO?
Posted by Volkov 6 years ago
Volkov
RFD

B&A: Tied
Conduct: Con, for Pro's forfeit
S&G: Tied
Arguments: Con, more fleshed out and made sense (you're not a good advocate for capitalism, Rob)
Sources: Con
Posted by Danielle 6 years ago
Danielle
Don't worry about it, Rob... I've been moving (still am) so I haven't been online for the past 4 days. I was scared I was going to miss the deadline to get back to you and hafta forfeit, haha. I don't think this is a guaranteed win at all -- the Repubs/Libs will probably take one look at the title and vote accordingly. Anyway, for our next debate, would you like me to go first? I am doing another debate as we speak and have another lined up, but I can send you the challenge if you'd like to be Con... probably not for at least a week though. We still don't have internet at my new place - grr (I'm at a rare Starbucks escape from the grind). Lemme know :)
Posted by Rob1Billion 6 years ago
Rob1Billion
Oops... Now I know why I only do forums these days - I'm too busy for the deadlines! Anyway good work Lwerd, Win #254 is gonna be an easy one for you.
Posted by PARADIGM_L0ST 6 years ago
PARADIGM_L0ST
I'm digging the role reversal thingy... Devil's Advocate!
Posted by Danielle 6 years ago
Danielle
... Okay.
Posted by wjmelements 6 years ago
wjmelements
lol@this
Posted by Danielle 6 years ago
Danielle
We go wayyy back...
Posted by Rob1Billion 6 years ago
Rob1Billion
So you and 'Noam' are on a first-name basis now, hmm? Must explain your radical socialist arguments!
Posted by Danielle 6 years ago
Danielle
"Although a radical 'libertarian socialist' like Noam Chomsky would likely disagree..."

Lol, the only thing I sourced from Noam's book was a quote from Clinton's economic adviser... so... this fails :)
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Cat47
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